þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended December 29, 2018
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
13-2622036
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
650 Madison Avenue,
New York, New York
|
|
10022
(Zip Code)
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(Address of principal executive offices)
|
|
|
Large accelerated filer
|
þ
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
o
|
|
|
Emerging growth company
|
o
|
|
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Page
|
|
|
||
PART I. FINANCIAL INFORMATION (Unaudited)
|
||
Item 1.
|
Financial Statements:
|
|
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
PART II. OTHER INFORMATION
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
|
|
|
EX-10.1
|
|
|
EX-10.2
|
|
|
EX-10.3
|
|
|
EX-31.1
|
|
|
EX-31.2
|
|
|
EX-32.1
|
|
|
EX-32.2
|
|
|
EX-101
|
INSTANCE DOCUMENT
|
|
EX-101
|
SCHEMA DOCUMENT
|
|
EX-101
|
CALCULATION LINKBASE DOCUMENT
|
|
EX-101
|
LABELS LINKBASE DOCUMENT
|
|
EX-101
|
PRESENTATION LINKBASE DOCUMENT
|
|
EX-101
|
DEFINITION LINKBASE DOCUMENT
|
|
|
|
|
|
1
|
|
|
|
December 29,
2018 |
|
March 31,
2018 |
||||
|
|
(millions)
(unaudited)
|
||||||
ASSETS
|
||||||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
680.5
|
|
|
$
|
1,304.6
|
|
Short-term investments
|
|
1,382.5
|
|
|
699.4
|
|
||
Accounts receivable, net of allowances of $212.9 million and $222.2 million
|
|
304.0
|
|
|
421.4
|
|
||
Inventories
|
|
914.5
|
|
|
761.3
|
|
||
Income tax receivable
|
|
34.4
|
|
|
38.0
|
|
||
Prepaid expenses and other current assets
|
|
380.5
|
|
|
323.7
|
|
||
Total current assets
|
|
3,696.4
|
|
|
3,548.4
|
|
||
Property and equipment, net
|
|
1,079.3
|
|
|
1,186.3
|
|
||
Deferred tax assets
|
|
76.5
|
|
|
86.6
|
|
||
Goodwill
|
|
924.8
|
|
|
950.5
|
|
||
Intangible assets, net
|
|
169.5
|
|
|
188.0
|
|
||
Other non-current assets
|
|
145.5
|
|
|
183.5
|
|
||
Total assets
|
|
$
|
6,092.0
|
|
|
$
|
6,143.3
|
|
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
|
|
|
|
||||
Short-term debt
|
|
$
|
—
|
|
|
$
|
10.1
|
|
Current portion of long-term debt
|
|
—
|
|
|
298.1
|
|
||
Accounts payable
|
|
169.1
|
|
|
165.6
|
|
||
Income tax payable
|
|
67.6
|
|
|
30.0
|
|
||
Accrued expenses and other current liabilities
|
|
1,037.0
|
|
|
1,083.4
|
|
||
Total current liabilities
|
|
1,273.7
|
|
|
1,587.2
|
|
||
Long-term debt
|
|
686.8
|
|
|
288.0
|
|
||
Income tax payable
|
|
152.2
|
|
|
124.8
|
|
||
Non-current liability for unrecognized tax benefits
|
|
88.5
|
|
|
79.2
|
|
||
Other non-current liabilities
|
|
536.9
|
|
|
606.7
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
||||
Total liabilities
|
|
2,738.1
|
|
|
2,685.9
|
|
||
Equity:
|
|
|
|
|
||||
Class A common stock, par value $.01 per share; 102.8 million and 102.0 million shares issued; 52.7 million and 55.4 million shares outstanding
|
|
1.0
|
|
|
1.0
|
|
||
Class B common stock, par value $.01 per share; 25.9 million shares issued and outstanding
|
|
0.3
|
|
|
0.3
|
|
||
Additional paid-in-capital
|
|
2,470.5
|
|
|
2,383.4
|
|
||
Retained earnings
|
|
5,996.3
|
|
|
5,752.2
|
|
||
Treasury stock, Class A, at cost; 50.1 million and 46.6 million shares
|
|
(5,012.9
|
)
|
|
(4,581.0
|
)
|
||
Accumulated other comprehensive loss
|
|
(101.3
|
)
|
|
(98.5
|
)
|
||
Total equity
|
|
3,353.9
|
|
|
3,457.4
|
|
||
Total liabilities and equity
|
|
$
|
6,092.0
|
|
|
$
|
6,143.3
|
|
|
2
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions, except per share data)
(unaudited)
|
||||||||||||||
Net revenues
|
|
$
|
1,725.8
|
|
|
$
|
1,641.8
|
|
|
$
|
4,807.3
|
|
|
$
|
4,653.1
|
|
Cost of goods sold
|
|
(666.3
|
)
|
|
(645.6
|
)
|
|
(1,822.8
|
)
|
|
(1,809.9
|
)
|
||||
Gross profit
|
|
1,059.5
|
|
|
996.2
|
|
|
2,984.5
|
|
|
2,843.2
|
|
||||
Selling, general, and administrative expenses
|
|
(823.4
|
)
|
|
(779.8
|
)
|
|
(2,358.9
|
)
|
|
(2,266.9
|
)
|
||||
Impairment of assets
|
|
(2.2
|
)
|
|
(3.9
|
)
|
|
(13.3
|
)
|
|
(24.8
|
)
|
||||
Restructuring and other charges
|
|
(40.1
|
)
|
|
(23.3
|
)
|
|
(78.4
|
)
|
|
(78.7
|
)
|
||||
Total other operating expenses, net
|
|
(865.7
|
)
|
|
(807.0
|
)
|
|
(2,450.6
|
)
|
|
(2,370.4
|
)
|
||||
Operating income
|
|
193.8
|
|
|
189.2
|
|
|
533.9
|
|
|
472.8
|
|
||||
Interest expense
|
|
(5.2
|
)
|
|
(4.8
|
)
|
|
(15.6
|
)
|
|
(14.4
|
)
|
||||
Interest income
|
|
9.9
|
|
|
3.3
|
|
|
29.5
|
|
|
7.6
|
|
||||
Other income (expense), net
|
|
1.0
|
|
|
(1.4
|
)
|
|
(0.6
|
)
|
|
(1.7
|
)
|
||||
Income before income taxes
|
|
199.5
|
|
|
186.3
|
|
|
547.2
|
|
|
464.3
|
|
||||
Income tax provision
|
|
(79.5
|
)
|
|
(268.1
|
)
|
|
(147.9
|
)
|
|
(342.8
|
)
|
||||
Net income (loss)
|
|
$
|
120.0
|
|
|
$
|
(81.8
|
)
|
|
$
|
399.3
|
|
|
$
|
121.5
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
1.50
|
|
|
$
|
(1.00
|
)
|
|
$
|
4.92
|
|
|
$
|
1.49
|
|
Diluted
|
|
$
|
1.48
|
|
|
$
|
(1.00
|
)
|
|
$
|
4.85
|
|
|
$
|
1.47
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
80.2
|
|
|
81.7
|
|
|
81.1
|
|
|
81.7
|
|
||||
Diluted
|
|
81.2
|
|
|
81.7
|
|
|
82.3
|
|
|
82.5
|
|
||||
Dividends declared per share
|
|
$
|
0.625
|
|
|
$
|
0.50
|
|
|
$
|
1.875
|
|
|
$
|
1.50
|
|
|
3
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
(unaudited)
|
||||||||||||||
Net income (loss)
|
|
$
|
120.0
|
|
|
$
|
(81.8
|
)
|
|
$
|
399.3
|
|
|
$
|
121.5
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gains (losses)
|
|
(0.3
|
)
|
|
3.0
|
|
|
(37.2
|
)
|
|
90.7
|
|
||||
Net gains (losses) on cash flow hedges
|
|
6.8
|
|
|
2.3
|
|
|
34.3
|
|
|
(22.0
|
)
|
||||
Net gains (losses) on defined benefit plans
|
|
—
|
|
|
(0.5
|
)
|
|
0.1
|
|
|
(0.9
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
6.5
|
|
|
4.8
|
|
|
(2.8
|
)
|
|
67.8
|
|
||||
Total comprehensive income (loss)
|
|
$
|
126.5
|
|
|
$
|
(77.0
|
)
|
|
$
|
396.5
|
|
|
$
|
189.3
|
|
|
4
|
|
|
|
Nine Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
|
(millions)
(unaudited)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
399.3
|
|
|
$
|
121.5
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
212.0
|
|
|
219.4
|
|
||
Deferred income tax expense (benefit)
|
|
13.7
|
|
|
(8.0
|
)
|
||
Loss on sale of property
|
|
11.6
|
|
|
—
|
|
||
Non-cash stock-based compensation expense
|
|
65.3
|
|
|
56.3
|
|
||
Non-cash impairment of assets
|
|
13.3
|
|
|
24.8
|
|
||
Non-cash restructuring-related inventory charges
|
|
3.1
|
|
|
1.3
|
|
||
Other non-cash charges
|
|
7.6
|
|
|
10.3
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
105.9
|
|
|
158.9
|
|
||
Inventories
|
|
(179.3
|
)
|
|
(11.6
|
)
|
||
Prepaid expenses and other current assets
|
|
(75.7
|
)
|
|
(4.2
|
)
|
||
Accounts payable and accrued liabilities
|
|
24.9
|
|
|
105.0
|
|
||
Income tax receivables and payables
|
|
82.7
|
|
|
279.7
|
|
||
Deferred income
|
|
(10.6
|
)
|
|
3.8
|
|
||
Other balance sheet changes
|
|
9.3
|
|
|
(6.1
|
)
|
||
Net cash provided by operating activities
|
|
683.1
|
|
|
951.1
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(149.2
|
)
|
|
(123.0
|
)
|
||
Purchases of investments
|
|
(2,627.8
|
)
|
|
(985.5
|
)
|
||
Proceeds from sales and maturities of investments
|
|
1,975.2
|
|
|
795.3
|
|
||
Acquisitions and ventures
|
|
(4.5
|
)
|
|
(4.6
|
)
|
||
Proceeds from sale of property
|
|
20.0
|
|
|
—
|
|
||
Settlement of net investment hedges
|
|
(23.8
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
|
(810.1
|
)
|
|
(317.8
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Repayments of short-term debt
|
|
(9.9
|
)
|
|
—
|
|
||
Proceeds from the issuance of long-term debt
|
|
398.1
|
|
|
—
|
|
||
Repayments of long-term debt
|
|
(300.0
|
)
|
|
—
|
|
||
Payments of capital lease obligations
|
|
(14.8
|
)
|
|
(21.2
|
)
|
||
Payments of dividends
|
|
(141.6
|
)
|
|
(121.7
|
)
|
||
Repurchases of common stock, including shares surrendered for tax withholdings
|
|
(431.9
|
)
|
|
(15.9
|
)
|
||
Proceeds from exercise of stock options
|
|
21.8
|
|
|
0.1
|
|
||
Other financing activities
|
|
(2.8
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
|
(481.1
|
)
|
|
(158.7
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
|
(23.9
|
)
|
|
36.8
|
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
|
(632.0
|
)
|
|
511.4
|
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
|
1,355.5
|
|
|
711.8
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
|
$
|
723.5
|
|
|
$
|
1,223.2
|
|
|
5
|
|
1.
|
Description of Business
|
2.
|
Basis of Presentation
|
|
6
|
|
3.
|
Summary of Significant Accounting Policies
|
|
7
|
|
|
|
Contractually-Guaranteed
Minimum Royalties
(a)
|
||
|
|
(millions)
|
||
Remainder of Fiscal 2019
|
|
$
|
19.5
|
|
Fiscal 2020
|
|
91.1
|
|
|
Fiscal 2021
|
|
83.7
|
|
|
Fiscal 2022 and thereafter
|
|
70.3
|
|
|
Total
|
|
$
|
264.6
|
|
|
(a)
|
Amounts presented do not contemplate anticipated contract renewals or royalties earned in excess of the contractually guaranteed minimums.
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||||||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
||||||||||||||||||||||||||||||||||||
|
|
North America
|
|
Europe
|
|
Asia
|
|
Other
|
|
Total
|
|
North America
|
|
Europe
|
|
Asia
|
|
Other
|
|
Total
|
||||||||||||||||||||
|
|
(millions)
|
||||||||||||||||||||||||||||||||||||||
Sales Channel
(a)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Wholesale
|
|
$
|
365.5
|
|
|
$
|
166.5
|
|
|
$
|
13.4
|
|
|
$
|
11.1
|
|
|
$
|
556.5
|
|
|
$
|
377.1
|
|
|
$
|
143.7
|
|
|
$
|
13.6
|
|
|
$
|
8.4
|
|
|
$
|
542.8
|
|
Retail
|
|
543.2
|
|
|
248.7
|
|
|
261.4
|
|
|
68.3
|
|
|
1,121.6
|
|
|
509.3
|
|
|
234.8
|
|
|
237.4
|
|
|
73.2
|
|
|
1,054.7
|
|
||||||||||
Licensing
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47.7
|
|
|
47.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44.3
|
|
|
44.3
|
|
||||||||||
Total
|
|
$
|
908.7
|
|
|
$
|
415.2
|
|
|
$
|
274.8
|
|
|
$
|
127.1
|
|
|
$
|
1,725.8
|
|
|
$
|
886.4
|
|
|
$
|
378.5
|
|
|
$
|
251.0
|
|
|
$
|
125.9
|
|
|
$
|
1,641.8
|
|
|
8
|
|
|
|
Nine Months Ended
|
||||||||||||||||||||||||||||||||||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
||||||||||||||||||||||||||||||||||||
|
|
North America
|
|
Europe
|
|
Asia
|
|
Other
|
|
Total
|
|
North America
|
|
Europe
|
|
Asia
|
|
Other
|
|
Total
|
||||||||||||||||||||
|
|
(millions)
|
||||||||||||||||||||||||||||||||||||||
Sales Channel
(a)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Wholesale
|
|
$
|
1,128.4
|
|
|
$
|
536.1
|
|
|
$
|
48.2
|
|
|
$
|
23.6
|
|
|
$
|
1,736.3
|
|
|
$
|
1,141.7
|
|
|
$
|
492.8
|
|
|
$
|
39.4
|
|
|
$
|
21.7
|
|
|
$
|
1,695.6
|
|
Retail
|
|
1,366.1
|
|
|
688.9
|
|
|
719.3
|
|
|
165.6
|
|
|
2,939.9
|
|
|
1,330.0
|
|
|
672.2
|
|
|
637.5
|
|
|
184.8
|
|
|
2,824.5
|
|
||||||||||
Licensing
|
|
—
|
|
|
—
|
|
|
—
|
|
|
131.1
|
|
|
131.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
133.0
|
|
|
133.0
|
|
||||||||||
Total
|
|
$
|
2,494.5
|
|
|
$
|
1,225.0
|
|
|
$
|
767.5
|
|
|
$
|
320.3
|
|
|
$
|
4,807.3
|
|
|
$
|
2,471.7
|
|
|
$
|
1,165.0
|
|
|
$
|
676.9
|
|
|
$
|
339.5
|
|
|
$
|
4,653.1
|
|
|
(a)
|
Net revenues from the Company's wholesale and retail businesses are recognized at a point in time. Net revenues from the Company's licensing business are recognized over time.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
|
||||||||||||||
Shipping costs
|
|
$
|
16.6
|
|
|
$
|
11.7
|
|
|
$
|
36.2
|
|
|
$
|
28.4
|
|
Handling costs
|
|
41.6
|
|
|
39.7
|
|
|
116.3
|
|
|
115.3
|
|
|
9
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
|
(millions)
|
||||||||||
Basic shares
|
|
80.2
|
|
|
81.7
|
|
|
81.1
|
|
|
81.7
|
|
Dilutive effect of stock options and RSUs
|
|
1.0
|
|
|
—
|
|
(a)
|
1.2
|
|
|
0.8
|
|
Diluted shares
|
|
81.2
|
|
|
81.7
|
|
|
82.3
|
|
|
82.5
|
|
|
(a)
|
Incremental shares of
0.9 million
attributable to outstanding stock options and RSUs were excluded from the computation of diluted shares for the three months ended December 30, 2017, as such shares would not be dilutive as a result of the net loss incurred during the period.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
|
||||||||||||||
Beginning reserve balance
|
|
$
|
198.7
|
|
|
$
|
231.5
|
|
|
$
|
202.5
|
|
|
$
|
202.8
|
|
Amount charged against revenue to increase reserve
|
|
146.1
|
|
|
125.3
|
|
|
396.3
|
|
|
418.6
|
|
||||
Amount credited against customer accounts to decrease reserve
|
|
(149.1
|
)
|
|
(155.6
|
)
|
|
(398.4
|
)
|
|
(427.8
|
)
|
||||
Foreign currency translation
|
|
(1.1
|
)
|
|
0.4
|
|
|
(5.8
|
)
|
|
8.0
|
|
||||
Ending reserve balance
|
|
$
|
194.6
|
|
|
$
|
201.6
|
|
|
$
|
194.6
|
|
|
$
|
201.6
|
|
|
10
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
|
||||||||||||||
Beginning reserve balance
|
|
$
|
17.2
|
|
|
$
|
17.3
|
|
|
$
|
19.7
|
|
|
$
|
11.6
|
|
Amount recorded to expense to increase reserve
(a)
|
|
1.7
|
|
|
0.1
|
|
|
1.2
|
|
|
6.4
|
|
||||
Amount written-off against customer accounts to decrease reserve
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(1.8
|
)
|
|
(1.8
|
)
|
||||
Foreign currency translation
|
|
(0.2
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
0.8
|
|
||||
Ending reserve balance
|
|
$
|
18.3
|
|
|
$
|
17.0
|
|
|
$
|
18.3
|
|
|
$
|
17.0
|
|
|
(a)
|
Amounts recorded to bad debt expense are included within SG&A expenses in the consolidated statements of operations.
|
|
11
|
|
•
|
Forecasted Inventory Transactions
— recognized as part of the cost of the inventory being hedged within cost of goods sold when the related inventory is sold to a third party.
|
•
|
Intercompany Royalties/Settlement of Foreign Currency Balances
— recognized within other income (expense), net during the period that the hedged balance is remeasured through earnings, generally through its settlement when the related payment occurs.
|
|
12
|
|
4.
|
Recently Issued Accounting Standards
|
|
13
|
|
|
14
|
|
5.
|
Property and Equipment
|
|
|
December 29,
2018 |
|
March 31,
2018 |
||||
|
|
(millions)
|
||||||
Land and improvements
|
|
$
|
15.3
|
|
|
$
|
16.8
|
|
Buildings and improvements
|
|
390.3
|
|
|
460.5
|
|
||
Furniture and fixtures
|
|
665.9
|
|
|
671.0
|
|
||
Machinery and equipment
|
|
412.1
|
|
|
430.4
|
|
||
Capitalized software
|
|
580.6
|
|
|
578.4
|
|
||
Leasehold improvements
|
|
1,224.6
|
|
|
1,181.2
|
|
||
Construction in progress
|
|
37.3
|
|
|
41.5
|
|
||
|
|
3,326.1
|
|
|
3,379.8
|
|
||
Less: accumulated depreciation
|
|
(2,246.8
|
)
|
|
(2,193.5
|
)
|
||
Property and equipment, net
|
|
$
|
1,079.3
|
|
|
$
|
1,186.3
|
|
|
15
|
|
6.
|
Other Assets and Liabilities
|
|
|
December 29,
2018 |
|
March 31,
2018 |
||||
|
|
(millions)
|
||||||
Other taxes receivable
|
|
$
|
176.7
|
|
|
$
|
171.4
|
|
Prepaid rent expense
|
|
40.0
|
|
|
37.0
|
|
||
Non-trade receivables
|
|
35.8
|
|
|
16.6
|
|
||
Inventory return asset (see Note 4)
|
|
23.7
|
|
|
—
|
|
||
Derivative financial instruments
|
|
16.0
|
|
|
12.3
|
|
||
Prepaid advertising and marketing
|
|
16.0
|
|
|
6.8
|
|
||
Restricted cash
|
|
12.6
|
|
|
15.5
|
|
||
Prepaid software maintenance
|
|
11.5
|
|
|
8.7
|
|
||
Tenant allowances receivable
|
|
6.6
|
|
|
4.3
|
|
||
Other prepaid expenses and current assets
|
|
41.6
|
|
|
51.1
|
|
||
Total prepaid expenses and other current assets
|
|
$
|
380.5
|
|
|
$
|
323.7
|
|
|
|
December 29,
2018 |
|
March 31,
2018 |
||||
|
|
(millions)
|
||||||
Non-current investments
|
|
$
|
45.7
|
|
|
$
|
86.2
|
|
Restricted cash
|
|
30.4
|
|
|
35.4
|
|
||
Security deposits
|
|
24.8
|
|
|
27.3
|
|
||
Derivative financial instruments
|
|
5.2
|
|
|
—
|
|
||
Other non-current assets
|
|
39.4
|
|
|
34.6
|
|
||
Total other non-current assets
|
|
$
|
145.5
|
|
|
$
|
183.5
|
|
|
|
December 29,
2018 |
|
March 31,
2018 |
||||
|
|
(millions)
|
||||||
Accrued operating expenses
|
|
$
|
253.1
|
|
|
$
|
225.8
|
|
Other taxes payable
|
|
219.9
|
|
|
194.2
|
|
||
Accrued payroll and benefits
|
|
214.3
|
|
|
227.8
|
|
||
Accrued inventory
|
|
152.5
|
|
|
174.0
|
|
||
Restructuring reserve
|
|
53.3
|
|
|
69.6
|
|
||
Dividends payable
|
|
49.1
|
|
|
40.6
|
|
||
Accrued capital expenditures
|
|
35.9
|
|
|
37.0
|
|
||
Capital lease obligations
|
|
21.9
|
|
|
19.5
|
|
||
Deferred income
|
|
20.1
|
|
|
30.4
|
|
||
Derivative financial instruments
|
|
4.3
|
|
|
60.8
|
|
||
Other accrued expenses and current liabilities
|
|
12.6
|
|
|
3.7
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
1,037.0
|
|
|
$
|
1,083.4
|
|
|
16
|
|
|
|
December 29,
2018 |
|
March 31,
2018 |
||||
|
|
(millions)
|
||||||
Capital lease obligations
|
|
$
|
217.9
|
|
|
$
|
236.4
|
|
Deferred rent obligations
|
|
199.4
|
|
|
212.2
|
|
||
Deferred tax liabilities
|
|
47.9
|
|
|
36.5
|
|
||
Derivative financial instruments
|
|
20.2
|
|
|
49.2
|
|
||
Restructuring reserve
|
|
13.4
|
|
|
27.9
|
|
||
Other non-current liabilities
|
|
38.1
|
|
|
44.5
|
|
||
Total other non-current liabilities
|
|
$
|
536.9
|
|
|
$
|
606.7
|
|
7.
|
Impairment of Assets
|
8.
|
Restructuring and Other Charges
|
|
17
|
|
|
|
December 29, 2018
|
||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
(millions)
|
||||||
Cash-related restructuring charges:
|
|
|
|
|
||||
Severance and benefit costs
|
|
$
|
17.1
|
|
|
$
|
34.3
|
|
Lease termination and store closure costs
|
|
1.2
|
|
|
1.2
|
|
||
Other cash charges
|
|
1.9
|
|
|
3.5
|
|
||
Total cash-related restructuring charges
|
|
20.2
|
|
|
39.0
|
|
||
Non-cash charges:
|
|
|
|
|
||||
Impairment of assets (see Note 7)
|
|
1.3
|
|
|
7.1
|
|
||
Inventory-related charges
(a)
|
|
1.9
|
|
|
1.9
|
|
||
Loss on sale of property
(b)
|
|
11.6
|
|
|
11.6
|
|
||
Total non-cash charges
|
|
14.8
|
|
|
20.6
|
|
||
Total charges
|
|
$
|
35.0
|
|
|
$
|
59.6
|
|
|
(a)
|
Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.
|
(b)
|
Loss on sale of property, which is recorded within restructuring and other charges in the consolidated statements of operations, was recorded in connection with the sale of one of the Company's distribution centers in North America. Total cash proceeds from the sale were
$20 million
.
|
|
|
Severance and Benefit Costs
|
|
Lease Termination
and Store
Closure Costs
|
|
Other Cash Charges
|
|
Total
|
||||||||
|
|
(millions)
|
||||||||||||||
Balance at March 31, 2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions charged to expense
|
|
34.3
|
|
|
1.2
|
|
|
3.5
|
|
|
39.0
|
|
||||
Cash payments charged against reserve
|
|
(11.4
|
)
|
|
(0.4
|
)
|
|
(3.5
|
)
|
|
(15.3
|
)
|
||||
Non-cash adjustments
|
|
(0.2
|
)
|
|
0.1
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Balance at December 29, 2018
|
|
$
|
22.7
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
23.6
|
|
|
18
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
||||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
|
Cumulative Charges
|
||||||||||
|
|
(millions)
|
||||||||||||||||||
Cash-related restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Severance and benefit costs
|
|
$
|
0.1
|
|
|
$
|
7.4
|
|
|
$
|
6.6
|
|
|
$
|
25.3
|
|
|
$
|
228.3
|
|
Lease termination and store closure costs
|
|
2.1
|
|
|
10.9
|
|
|
3.7
|
|
|
28.5
|
|
|
124.2
|
|
|||||
Other cash charges
|
|
0.6
|
|
|
0.8
|
|
|
0.8
|
|
|
9.2
|
|
|
26.2
|
|
|||||
Total cash-related restructuring charges
|
|
2.8
|
|
|
19.1
|
|
|
11.1
|
|
|
63.0
|
|
|
378.7
|
|
|||||
Non-cash charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of assets (see Note 7)
|
|
0.4
|
|
|
2.2
|
|
|
0.4
|
|
|
14.0
|
|
|
251.0
|
|
|||||
Inventory-related charges
(a)
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
1.3
|
|
|
206.7
|
|
|||||
Accelerated stock-based compensation expense
(b)
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|
0.7
|
|
|||||
Other non-cash charges
|
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|||||
Total non-cash charges
|
|
3.6
|
|
|
2.9
|
|
|
3.6
|
|
|
16.0
|
|
|
460.4
|
|
|||||
Total charges
|
|
$
|
6.4
|
|
|
$
|
22.0
|
|
|
$
|
14.7
|
|
|
$
|
79.0
|
|
|
$
|
839.1
|
|
|
(a)
|
Cumulative inventory-related charges include
$155.2 million
associated with the destruction of inventory out of current liquidation channels. Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.
|
(b)
|
Accelerated stock-based compensation expense, which is recorded within restructuring and other charges in the consolidated statements of operations, was recorded in connection with vesting provisions associated with certain separation agreements.
|
|
19
|
|
|
|
Severance and Benefit Costs
|
|
Lease Termination
and Store
Closure Costs
|
|
Other Cash Charges
|
|
Total
|
||||||||
|
|
(millions)
|
||||||||||||||
Balance at March 31, 2018
|
|
$
|
37.6
|
|
|
$
|
53.5
|
|
|
$
|
1.8
|
|
|
$
|
92.9
|
|
Additions charged to expense
|
|
6.6
|
|
|
3.7
|
|
|
0.8
|
|
|
11.1
|
|
||||
Cash payments charged against reserve
|
|
(32.2
|
)
|
|
(28.6
|
)
|
|
(1.8
|
)
|
|
(62.6
|
)
|
||||
Non-cash adjustments
|
|
(0.3
|
)
|
|
0.6
|
|
|
—
|
|
|
0.3
|
|
||||
Balance at December 29, 2018
|
|
$
|
11.7
|
|
|
$
|
29.2
|
|
|
$
|
0.8
|
|
|
$
|
41.7
|
|
9.
|
Income Taxes
|
|
20
|
|
|
21
|
|
10.
|
Debt
|
|
|
December 29,
2018 |
|
March 31,
2018 |
||||
|
|
(millions)
|
||||||
$300 million 2.125% Senior Notes
(a)
|
|
$
|
—
|
|
|
$
|
298.1
|
|
$300 million 2.625% Senior Notes
(b)
|
|
291.2
|
|
|
288.0
|
|
||
$400 million 3.750% Senior Notes
(c)
|
|
395.6
|
|
|
—
|
|
||
Borrowings outstanding under credit facilities
|
|
—
|
|
|
10.1
|
|
||
Total debt
|
|
686.8
|
|
|
596.2
|
|
||
Less: short-term debt and current portion of long-term debt
|
|
—
|
|
|
308.2
|
|
||
Long-term debt
|
|
$
|
686.8
|
|
|
$
|
288.0
|
|
|
(a)
|
The carrying value of the 2.125% Senior Notes as of
March 31, 2018
reflects adjustments of
$1.6 million
associated with the Company's related interest rate swap contract (see
Note 12
), and is also presented net of unamortized debt issuance costs and discount of
$0.3 million
.
|
(b)
|
The carrying value of the 2.625% Senior Notes as of
December 29, 2018
and
March 31, 2018
reflects adjustments of
$8.0 million
and
$10.8 million
, respectively, associated with the Company's related interest rate swap contract (see
Note 12
). The carrying value of the 2.625% Senior Notes is also presented net of unamortized debt issuance costs and discount of
$0.8 million
and
$1.2 million
as of
December 29, 2018
and
March 31, 2018
, respectively.
|
(c)
|
The carrying value of the 3.750% Senior Notes is presented net of unamortized debt issuance costs and discount of
$4.4 million
as of
December 29, 2018
.
|
|
22
|
|
|
23
|
|
•
|
China Credit Facility
— provides Ralph Lauren Trading (Shanghai) Co., Ltd. with a revolving line of credit of up to
50 million
Chinese Renminbi (approximately
$7 million
) through
April 3, 2019
, which is also able to be used to support bank guarantees.
|
•
|
South Korea Credit Facility
— provides Ralph Lauren (Korea) Ltd. with a revolving line of credit of up to
30 billion
South Korean Won (approximately
$27 million
) through
October 31, 2019
.
|
11.
|
Fair Value Measurements
|
•
|
Level 1
— inputs to the valuation methodology based on quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2
— inputs to the valuation methodology based on quoted prices for similar assets or liabilities in active markets for substantially the full term of the financial instrument; quoted prices for identical or similar instruments in markets that are not active for substantially the full term of the financial instrument; and model-derived valuations whose inputs or significant value drivers are observable.
|
•
|
Level 3
— inputs to the valuation methodology based on unobservable prices or valuation techniques that are significant to the fair value measurement.
|
|
|
December 29,
2018 |
|
March 31,
2018 |
||||
|
|
(millions)
|
||||||
Investments in commercial paper
(a)(b)
|
|
$
|
262.1
|
|
|
$
|
234.2
|
|
Derivative assets
(a)
|
|
21.2
|
|
|
12.3
|
|
||
Derivative liabilities
(a)
|
|
24.5
|
|
|
110.0
|
|
|
(a)
|
Based on Level 2 measurements.
|
(b)
|
As of
December 29, 2018
,
$64.7 million
was included within cash and cash equivalents and
$197.4 million
was included within short-term investments in the consolidated balance sheet. As of
March 31, 2018
,
$15.0 million
was included within cash and cash equivalents and
$219.2 million
was included within short-term investments in the consolidated balance sheet.
|
|
24
|
|
|
|
December 29, 2018
|
|
March 31, 2018
|
||||||||||||
|
|
Carrying Value
(a)
|
|
Fair Value
(b)
|
|
Carrying Value
(a)
|
|
Fair Value
(b)
|
||||||||
|
|
(millions)
|
||||||||||||||
$300 million 2.125% Senior Notes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
298.1
|
|
|
$
|
299.4
|
|
$300 million 2.625% Senior Notes
|
|
291.2
|
|
|
296.8
|
|
|
288.0
|
|
|
298.7
|
|
||||
$400 million 3.750% Senior Notes
|
|
395.6
|
|
|
395.7
|
|
|
—
|
|
|
—
|
|
||||
Borrowings outstanding under credit facilities
|
|
—
|
|
|
—
|
|
|
10.1
|
|
|
10.1
|
|
|
(a)
|
See
Note 10
for discussion of the carrying values of the Company's senior notes.
|
(b)
|
Based on Level 2 measurements.
|
|
25
|
|
12.
|
Financial Instruments
|
|
|
Notional Amounts
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||||||||
Derivative Instrument
(a)
|
|
December 29,
2018 |
|
March 31,
2018 |
|
December 29,
2018 |
|
March 31,
2018 |
|
December 29,
2018 |
|
March 31,
2018 |
||||||||||||||||||||
|
|
|
|
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
||||||||||||
|
|
(millions)
|
||||||||||||||||||||||||||||||
Designated Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FC — Cash flow hedges
|
|
$
|
637.6
|
|
|
$
|
514.5
|
|
|
(e)
|
|
$
|
17.8
|
|
|
PP
|
|
$
|
1.1
|
|
|
AE
|
|
$
|
2.7
|
|
|
(f)
|
|
$
|
13.5
|
|
IRS — Fixed-rate debt
|
|
300.0
|
|
|
600.0
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
ONCL
|
|
8.0
|
|
|
(g)
|
|
12.4
|
|
||||||
Net investment hedges
(c)
|
|
708.4
|
|
|
1,081.2
|
|
|
ONCA
|
|
3.1
|
|
|
PP
|
|
0.1
|
|
|
ONCL
|
|
12.2
|
|
|
(h)
|
|
82.6
|
|
||||||
Total Designated Hedges
|
|
1,646.0
|
|
|
2,195.7
|
|
|
|
|
20.9
|
|
|
|
|
1.2
|
|
|
|
|
22.9
|
|
|
|
|
108.5
|
|
||||||
Undesignated Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FC — Undesignated hedges
(d)
|
|
168.2
|
|
|
459.2
|
|
|
PP
|
|
0.3
|
|
|
PP
|
|
11.1
|
|
|
AE
|
|
1.6
|
|
|
AE
|
|
1.5
|
|
||||||
Total Hedges
|
|
$
|
1,814.2
|
|
|
$
|
2,654.9
|
|
|
|
|
$
|
21.2
|
|
|
|
|
$
|
12.3
|
|
|
|
|
$
|
24.5
|
|
|
|
|
$
|
110.0
|
|
|
(a)
|
FC = Forward foreign currency exchange contracts; IRS = Interest rate swap contracts
|
(b)
|
PP = Prepaid expenses and other current assets; AE = Accrued expenses and other current liabilities; ONCA = Other non-current assets; ONCL = Other non-current liabilities.
|
(c)
|
Includes cross-currency swaps and forward foreign currency exchange contracts designated as hedges of the Company's net investment in certain foreign operations.
|
(d)
|
Primarily includes undesignated hedges of foreign currency-denominated intercompany loans and other intercompany balances.
|
(e)
|
$15.7 million
included within prepaid expenses and other current assets and
$2.1 million
included within other non-current assets.
|
(f)
|
$12.9 million
included within accrued expenses and other current liabilities and
$0.6 million
included within other non-current liabilities.
|
(g)
|
$1.6 million
included within accrued expenses and other current liabilities and
$10.8 million
included within other non-current liabilities.
|
|
26
|
|
(h)
|
$44.8 million
included within accrued expenses and other current liabilities and
$37.8 million
included within other non-current liabilities.
|
|
|
December 29, 2018
|
|
March 31, 2018
|
||||||||||||||||||||
|
|
Gross Amounts Presented in the Balance Sheet
|
|
Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements
|
|
Net
Amount
|
|
Gross Amounts Presented in the Balance Sheet
|
|
Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements
|
|
Net
Amount
|
||||||||||||
|
|
(millions)
|
||||||||||||||||||||||
Derivative assets
|
|
$
|
21.2
|
|
|
$
|
(3.6
|
)
|
|
$
|
17.6
|
|
|
$
|
12.3
|
|
|
$
|
(10.7
|
)
|
|
$
|
1.6
|
|
Derivative liabilities
|
|
24.5
|
|
|
(3.6
|
)
|
|
20.9
|
|
|
110.0
|
|
|
(10.7
|
)
|
|
99.3
|
|
|
|
Gains (Losses)
Recognized in OCI
|
||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
|
||||||||||||||
Designated Hedges:
|
|
|
|
|
|
|
|
|
||||||||
FC — Cash flow hedges
|
|
$
|
11.1
|
|
|
$
|
(2.9
|
)
|
|
$
|
38.5
|
|
|
$
|
(28.8
|
)
|
Net investment hedges — effective portion
|
|
10.6
|
|
|
(10.4
|
)
|
|
50.8
|
|
|
(73.1
|
)
|
||||
Net investment hedges — portion excluded from assessment of hedge effectiveness
|
|
6.8
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Total Designated Hedges
|
|
$
|
28.5
|
|
|
$
|
(13.3
|
)
|
|
$
|
89.4
|
|
|
$
|
(101.9
|
)
|
|
|
Location and Amount of Gains (Losses)
from Cash Flow Hedges Reclassified from AOCI to Earnings
|
||||||||||||||||||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||||||||||||||||||
|
|
Cost of goods sold
|
|
Other income (expense), net
|
|
Cost of goods sold
|
|
Other income (expense), net
|
|
Cost of goods sold
|
|
Other income (expense), net
|
|
Cost of goods sold
|
|
Other income (expense), net
|
||||||||||||||||
|
|
(millions)
|
||||||||||||||||||||||||||||||
Total amounts presented in the consolidated statements of operations in which the effects of related cash flow hedges are recorded
|
|
$
|
(666.3
|
)
|
|
$
|
1.0
|
|
|
$
|
(645.6
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(1,822.8
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(1,809.9
|
)
|
|
$
|
(1.7
|
)
|
Effects of cash flow hedging:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
FC — Cash flow hedges
|
|
4.3
|
|
|
(0.4
|
)
|
|
(5.9
|
)
|
|
0.6
|
|
|
(1.2
|
)
|
|
1.7
|
|
|
(4.3
|
)
|
|
(0.4
|
)
|
|
27
|
|
|
|
Gains (Losses) from Net Investment Hedges
Recognized in Earnings
|
|
Location of Gains (Losses)
Recognized in Earnings |
||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
|
|||||||||
|
|
(millions)
|
|
|
||||||||||||||
Net Investment Hedges
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net investment hedges — portion excluded from assessment of hedge effectiveness
(a)
|
|
$
|
4.8
|
|
|
$
|
3.2
|
|
|
$
|
13.9
|
|
|
$
|
7.0
|
|
|
Interest expense
|
Total Net Investment Hedges
|
|
$
|
4.8
|
|
|
$
|
3.2
|
|
|
$
|
13.9
|
|
|
$
|
7.0
|
|
|
|
|
(a)
|
Amounts recognized in other comprehensive income (loss) ("OCI") related to the effective portion of the Company's net investment hedges would be recognized in earnings only upon the sale or liquidation of the hedged net investment.
|
|
|
Gains (Losses)
Recognized in Earnings
|
|
Location of Gains (Losses)
Recognized in Earnings
|
||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
|
|||||||||
|
|
(millions)
|
|
|
||||||||||||||
Undesignated Hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||
FC — Undesignated hedges
|
|
$
|
(1.0
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
4.7
|
|
|
$
|
0.2
|
|
|
Other income (expense), net
|
Total Undesignated Hedges
|
|
$
|
(1.0
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
4.7
|
|
|
$
|
0.2
|
|
|
|
|
28
|
|
|
|
|
|
Carrying Value of
the Hedged Item
|
|
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Item
|
||||||||||||
Hedged Item
|
|
Balance Sheet Line in which the Hedged Item is Included
|
|
December 29,
2018 |
|
March 31,
2018 |
|
December 29,
2018 |
|
March 31,
2018 |
||||||||
|
|
|
|
(millions)
|
||||||||||||||
$300 million 2.125% Senior Notes
|
|
Current portion of long-term debt
|
|
N/A
|
|
|
$
|
298.1
|
|
|
N/A
|
|
|
$
|
(1.6
|
)
|
||
$300 million 2.625% Senior Notes
|
|
Long-term debt
|
|
$
|
291.2
|
|
|
288.0
|
|
|
$
|
(8.0
|
)
|
|
(10.8
|
)
|
|
29
|
|
13.
|
Commitments and Contingencies
|
|
|
Minimum
Lease Payments
(a)
|
||
|
|
(millions)
|
||
Remainder of Fiscal 2019
|
|
$
|
—
|
|
Fiscal 2020
|
|
10.2
|
|
|
Fiscal 2021
|
|
19.4
|
|
|
Fiscal 2022
|
|
27.5
|
|
|
Fiscal 2023
|
|
27.7
|
|
|
Fiscal 2024 and thereafter
|
|
261.8
|
|
|
Total minimum rental payments
|
|
$
|
346.6
|
|
|
(a)
|
Excludes future minimum commitments related to the original lease term and space for the corporate office in New York City, which were previously included in the minimum lease payments table in Note 14 of the Fiscal 2018 10-K.
|
|
30
|
|
14.
|
Equity
|
|
|
Nine Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
|
(millions)
|
||||||
Balance at beginning of period
|
|
$
|
3,457.4
|
|
|
$
|
3,299.6
|
|
Comprehensive income
|
|
396.5
|
|
|
189.3
|
|
||
Dividends declared
|
|
(150.1
|
)
|
|
(121.9
|
)
|
||
Repurchases of common stock, including shares surrendered for tax withholdings
|
|
(431.9
|
)
|
|
(15.9
|
)
|
||
Stock-based compensation
|
|
65.3
|
|
|
56.3
|
|
||
Shares issued pursuant to stock-based compensation arrangements
|
|
21.8
|
|
|
0.1
|
|
||
Cumulative adjustment from adoption of new accounting standards (see Note 4)
|
|
(5.1
|
)
|
|
—
|
|
||
Balance at end of period
|
|
$
|
3,353.9
|
|
|
$
|
3,407.5
|
|
|
|
Nine Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
|
(millions)
|
||||||
Cost of shares repurchased
|
|
$
|
400.0
|
|
|
$
|
—
|
|
Number of shares repurchased
|
|
3.2
|
|
|
—
|
|
|
31
|
|
15.
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
Foreign Currency Translation Gains (Losses)
(a)
|
|
Net Unrealized Gains (Losses) on Cash Flow Hedges
(b)
|
|
Net Unrealized Gains (Losses) on Defined
Benefit Plans
(c)
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||||
|
|
(millions)
|
||||||||||||||
Balance at April 1, 2017
|
|
$
|
(206.2
|
)
|
|
$
|
14.6
|
|
|
$
|
(6.8
|
)
|
|
$
|
(198.4
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
OCI before reclassifications
|
|
90.7
|
|
|
(26.4
|
)
|
|
(1.0
|
)
|
|
63.3
|
|
||||
Amounts reclassified from AOCI to earnings
|
|
—
|
|
|
4.4
|
|
|
0.1
|
|
|
4.5
|
|
||||
Other comprehensive income (loss), net of tax
|
|
90.7
|
|
|
(22.0
|
)
|
|
(0.9
|
)
|
|
67.8
|
|
||||
Balance at December 30, 2017
|
|
$
|
(115.5
|
)
|
|
$
|
(7.4
|
)
|
|
$
|
(7.7
|
)
|
|
$
|
(130.6
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at March 31, 2018
|
|
$
|
(79.3
|
)
|
|
$
|
(16.0
|
)
|
|
$
|
(3.2
|
)
|
|
$
|
(98.5
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
OCI before reclassifications
|
|
(37.2
|
)
|
|
34.8
|
|
|
0.3
|
|
|
(2.1
|
)
|
||||
Amounts reclassified from AOCI to earnings
|
|
—
|
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(0.7
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
(37.2
|
)
|
|
34.3
|
|
|
0.1
|
|
|
(2.8
|
)
|
||||
Balance at December 29, 2018
|
|
$
|
(116.5
|
)
|
|
$
|
18.3
|
|
|
$
|
(3.1
|
)
|
|
$
|
(101.3
|
)
|
|
(a)
|
OCI before reclassifications to earnings related to foreign currency translation gains (losses) includes an income tax provision of
$7.3 million
for the
nine months ended
December 29, 2018
, and includes an income tax benefit of
$23.4 million
for the
nine months ended
December 30, 2017
. OCI before reclassifications to earnings for the
nine-month periods ended
December 29, 2018
and
December 30, 2017
includes a gain of
$38.7 million
(net of a
$12.2 million
income tax provision) and a loss of
$45.5 million
(net of a
$27.6 million
income tax benefit), respectively, related to changes in the fair values of instruments designated as hedges of the Company's net investment in certain foreign operations (see
Note 12
).
|
|
32
|
|
(b)
|
OCI before reclassifications to earnings related to net unrealized gains (losses) on cash flow hedges are presented net of an income tax provision of
$3.7 million
and an income tax benefit of
$2.4 million
for the
nine-month periods ended
December 29, 2018
and
December 30, 2017
, respectively. The tax effects on amounts reclassified from AOCI to earnings are presented in a table below.
|
(c)
|
Activity is presented net of taxes, which were immaterial for both periods presented.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Location of
Gains (Losses)
Reclassified from AOCI
to Earnings
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
|
|||||||||
|
|
(millions)
|
|
|
||||||||||||||
Gains (losses) on cash flow hedges
(a)
:
|
|
|
|
|
|
|
|
|
|
|
||||||||
FC — Cash flow hedges
|
|
$
|
4.3
|
|
|
$
|
(5.9
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(4.3
|
)
|
|
Cost of goods sold
|
FC — Cash flow hedges
|
|
(0.4
|
)
|
|
0.6
|
|
|
1.7
|
|
|
(0.4
|
)
|
|
Other income (expense), net
|
||||
Tax effect
|
|
(0.3
|
)
|
|
0.5
|
|
|
—
|
|
|
0.3
|
|
|
Income tax provision
|
||||
Net of tax
|
|
$
|
3.6
|
|
|
$
|
(4.8
|
)
|
|
$
|
0.5
|
|
|
$
|
(4.4
|
)
|
|
|
|
(a)
|
FC = Forward foreign currency exchange contracts.
|
16.
|
Stock-based Compensation
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
|
||||||||
|
|
(millions)
|
|
||||||||||||||
Compensation expense
|
|
$
|
22.5
|
|
|
$
|
16.9
|
|
(a)
|
$
|
65.3
|
|
|
$
|
56.3
|
|
(a)
|
Income tax benefit
|
|
(3.4
|
)
|
|
(6.3
|
)
|
|
(9.9
|
)
|
|
(20.9
|
)
|
|
|
(a)
|
The
three-month and nine-month periods ended
December 30, 2017
include
$0.7 million
and
$2.8 million
, respectively, of accelerated stock-based compensation expense recorded within restructuring and other charges in the consolidated statements of operations (see Note 8). All other stock-based compensation expense was recorded within SG&A expenses.
|
|
33
|
|
|
|
Number of Options
|
|
|
|
(thousands)
|
|
Options outstanding at March 31, 2018
|
|
1,151
|
|
Granted
|
|
—
|
|
Exercised
|
|
(162
|
)
|
Cancelled/Forfeited
|
|
(150
|
)
|
Options outstanding at December 29, 2018
|
|
839
|
|
|
|
Number of Shares
|
||||
|
|
Restricted Stock
|
|
Service-based RSUs
|
||
|
|
(thousands)
|
||||
Nonvested at March 31, 2018
|
|
19
|
|
|
1,072
|
|
Granted
|
|
—
|
|
|
585
|
|
Vested
|
|
(9
|
)
|
|
(420
|
)
|
Forfeited
|
|
—
|
|
|
(110
|
)
|
Nonvested at December 29, 2018
|
|
10
|
|
|
1,127
|
|
|
34
|
|
|
|
Number of
Performance-based
RSUs
|
|
|
|
(thousands)
|
|
Nonvested at March 31, 2018
|
|
1,157
|
|
Granted
|
|
154
|
|
Change due to performance condition achievement
|
|
(29
|
)
|
Vested
|
|
(232
|
)
|
Forfeited
|
|
(20
|
)
|
Nonvested at December 29, 2018
|
|
1,030
|
|
|
|
Nine Months Ended
|
|
|
|
December 29,
2018 |
|
Expected term (years)
|
|
2.6
|
|
Expected volatility
|
|
33.5
|
%
|
Expected dividend yield
|
|
1.9
|
%
|
Risk-free interest rate
|
|
2.6
|
%
|
|
|
Number of
Market-based RSUs
|
|
|
|
(thousands)
|
|
Nonvested at March 31, 2018
|
|
—
|
|
Granted
|
|
80
|
|
Change due to market condition achievement
|
|
—
|
|
Vested
|
|
—
|
|
Forfeited
|
|
—
|
|
Nonvested at December 29, 2018
|
|
80
|
|
|
35
|
|
17.
|
Segment Information
|
•
|
North America
— The North America segment primarily consists of sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company's wholesale and retail businesses in the U.S. and Canada, excluding Club Monaco. In North America, the Company's wholesale business is comprised primarily of sales to department stores, and to a lesser extent, specialty stores. The Company's retail business in North America is comprised of its Ralph Lauren stores, its factory stores, and its digital commerce site, www.RalphLauren.com.
|
•
|
Europe
— The Europe segment primarily consists of sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company's wholesale and retail businesses in Europe and the Middle East, excluding Club Monaco. In Europe, the Company's wholesale business is comprised of a varying mix of sales to both department stores and specialty stores, depending on the country. The Company's retail business in Europe is comprised of its Ralph Lauren stores, its factory stores, its concession-based shop-within-shops, and its various digital commerce sites.
|
•
|
Asia
— The Asia segment primarily consists of sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company's wholesale and retail businesses in Asia, Australia, and New Zealand. The Company's retail business in Asia is comprised of its Ralph Lauren stores, its factory stores, its concession-based shop-within-shops, and its digital commerce site, www.RalphLauren.cn, which launched in September 2018. In addition, the Company sells its products online through various third-party digital partner commerce sites. In Asia, the Company's wholesale business is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
|
||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
||||||||
North America
|
|
$
|
908.7
|
|
|
$
|
886.4
|
|
|
$
|
2,494.5
|
|
|
$
|
2,471.7
|
|
Europe
|
|
415.2
|
|
|
378.5
|
|
|
1,225.0
|
|
|
1,165.0
|
|
||||
Asia
|
|
274.8
|
|
|
251.0
|
|
|
767.5
|
|
|
676.9
|
|
||||
Other non-reportable segments
|
|
127.1
|
|
|
125.9
|
|
|
320.3
|
|
|
339.5
|
|
||||
Total net revenues
|
|
$
|
1,725.8
|
|
|
$
|
1,641.8
|
|
|
$
|
4,807.3
|
|
|
$
|
4,653.1
|
|
|
36
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
|
||||||||||||||
Operating income
(a)
:
|
|
|
|
|
|
|
|
|
||||||||
North America
|
|
$
|
204.3
|
|
|
$
|
196.6
|
|
|
$
|
574.0
|
|
|
$
|
549.3
|
|
Europe
|
|
91.4
|
|
|
81.0
|
|
|
291.9
|
|
|
273.6
|
|
||||
Asia
|
|
47.9
|
|
|
44.3
|
|
|
123.3
|
|
|
101.0
|
|
||||
Other non-reportable segments
|
|
42.6
|
|
|
37.1
|
|
|
97.9
|
|
|
96.9
|
|
||||
|
|
386.2
|
|
|
359.0
|
|
|
1,087.1
|
|
|
1,020.8
|
|
||||
Unallocated corporate expenses
|
|
(152.3
|
)
|
|
(146.5
|
)
|
|
(474.8
|
)
|
|
(469.3
|
)
|
||||
Unallocated restructuring and other charges
(b)
|
|
(40.1
|
)
|
|
(23.3
|
)
|
|
(78.4
|
)
|
|
(78.7
|
)
|
||||
Total operating income
|
|
$
|
193.8
|
|
|
$
|
189.2
|
|
|
$
|
533.9
|
|
|
$
|
472.8
|
|
|
(a)
|
Segment operating income and unallocated corporate expenses during the
three-month and nine-month periods ended
December 29, 2018
and
December 30, 2017
included certain restructuring-related inventory charges (see
Note 8
) and asset impairment charges (see
Note 7
), which are detailed below:
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
|
(millions)
|
||||||||||||||
|
Restructuring-related inventory charges:
|
|
|
|
|
|
|
|
|
||||||||
|
North America
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.8
|
)
|
|
Europe
|
|
(1.2
|
)
|
|
—
|
|
|
(1.2
|
)
|
|
(0.1
|
)
|
||||
|
Other non-reportable segments
|
|
(1.9
|
)
|
|
—
|
|
|
(1.9
|
)
|
|
(0.4
|
)
|
||||
|
Total restructuring-related inventory charges
|
|
$
|
(3.1
|
)
|
|
$
|
—
|
|
|
$
|
(3.1
|
)
|
|
$
|
(1.3
|
)
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
|
(millions)
|
||||||||||||||
|
Asset impairment charges:
|
|
|
|
|
|
|
|
|
||||||||
|
North America
|
|
$
|
(1.1
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(2.6
|
)
|
|
Europe
|
|
(0.4
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
(1.2
|
)
|
||||
|
Asia
|
|
—
|
|
|
(0.2
|
)
|
|
(3.7
|
)
|
|
(1.1
|
)
|
||||
|
Other non-reportable segments
|
|
(0.4
|
)
|
|
(0.1
|
)
|
|
(7.0
|
)
|
|
(8.7
|
)
|
||||
|
Unallocated corporate expenses
|
|
(0.3
|
)
|
|
(1.9
|
)
|
|
(0.6
|
)
|
|
(11.2
|
)
|
||||
|
Total asset impairment charges
|
|
$
|
(2.2
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
(13.3
|
)
|
|
$
|
(24.8
|
)
|
|
37
|
|
(b)
|
The
three-month and nine-month periods ended
December 29, 2018
and
December 30, 2017
included certain unallocated restructuring and other charges (see
Note 8
), which are detailed below:
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
|
(millions)
|
||||||||||||||
|
Unallocated restructuring and other charges:
|
|
|
|
|
|
|
|
|
||||||||
|
North America-related
|
|
$
|
(14.1
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(17.6
|
)
|
|
$
|
(14.5
|
)
|
|
Europe-related
|
|
(2.6
|
)
|
|
(0.5
|
)
|
|
(10.0
|
)
|
|
(5.6
|
)
|
||||
|
Asia-related
|
|
(0.4
|
)
|
|
0.1
|
|
|
(0.2
|
)
|
|
1.0
|
|
||||
|
Other non-reportable segment-related
|
|
(2.6
|
)
|
|
—
|
|
|
(5.4
|
)
|
|
(6.8
|
)
|
||||
|
Corporate-related
|
|
(16.9
|
)
|
|
(18.1
|
)
|
|
(30.5
|
)
|
|
(37.8
|
)
|
||||
|
Unallocated restructuring charges
|
|
(36.6
|
)
|
|
(19.8
|
)
|
|
(63.7
|
)
|
|
(63.7
|
)
|
||||
|
Other charges (see Note 8)
|
|
(3.5
|
)
|
|
(3.5
|
)
|
|
(14.7
|
)
|
|
(15.0
|
)
|
||||
|
Total unallocated restructuring and other charges
|
|
$
|
(40.1
|
)
|
|
$
|
(23.3
|
)
|
|
$
|
(78.4
|
)
|
|
$
|
(78.7
|
)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
|
||||||||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
||||||||
North America
|
|
$
|
21.7
|
|
|
$
|
19.5
|
|
|
$
|
61.8
|
|
|
$
|
61.1
|
|
Europe
|
|
8.7
|
|
|
9.1
|
|
|
25.1
|
|
|
25.7
|
|
||||
Asia
|
|
12.2
|
|
|
12.1
|
|
|
36.8
|
|
|
35.7
|
|
||||
Other non-reportable segments
|
|
1.7
|
|
|
2.6
|
|
|
5.6
|
|
|
8.2
|
|
||||
Unallocated corporate expenses
|
|
24.2
|
|
|
25.9
|
|
|
72.2
|
|
|
78.2
|
|
||||
Unallocated restructuring and other charges (see Note 8)
|
|
3.5
|
|
|
3.5
|
|
|
10.5
|
|
|
10.5
|
|
||||
Total depreciation and amortization
|
|
$
|
72.0
|
|
|
$
|
72.7
|
|
|
$
|
212.0
|
|
|
$
|
219.4
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
|
||||||||||||||
Net revenues
(a)
:
|
|
|
|
|
|
|
|
|
||||||||
The Americas
(b)
|
|
$
|
1,033.4
|
|
|
$
|
1,009.5
|
|
|
$
|
2,807.0
|
|
|
$
|
2,801.8
|
|
Europe
(c)
|
|
417.4
|
|
|
381.0
|
|
|
1,231.8
|
|
|
1,173.3
|
|
||||
Asia
(d)
|
|
275.0
|
|
|
251.3
|
|
|
768.5
|
|
|
678.0
|
|
||||
Total net revenues
|
|
$
|
1,725.8
|
|
|
$
|
1,641.8
|
|
|
$
|
4,807.3
|
|
|
$
|
4,653.1
|
|
|
(a)
|
Net revenues for certain of the Company's licensed operations are included within the geographic location of the reporting subsidiary which holds the respective license.
|
|
38
|
|
(b)
|
Includes the U.S., Canada, and Latin America. Net revenues earned in the U.S. during the
three-month and nine-month periods ended
December 29, 2018
were
$968.9 million
and
$2.631 billion
, respectively, and
$946.3 million
and
$2.629 billion
during the
three-month and nine-month periods ended
December 30, 2017
, respectively.
|
(c)
|
Includes the Middle East.
|
(d)
|
Includes Australia and New Zealand.
|
18.
|
Additional Financial Information
|
|
|
December 29,
2018 |
|
March 31,
2018 |
||||
|
|
(millions)
|
||||||
Cash and cash equivalents
|
|
$
|
680.5
|
|
|
$
|
1,304.6
|
|
Restricted cash included within prepaid expenses and other current assets
|
|
12.6
|
|
|
15.5
|
|
||
Restricted cash included within other non-current assets
|
|
30.4
|
|
|
35.4
|
|
||
Total cash, cash equivalents, and restricted cash
|
|
$
|
723.5
|
|
|
$
|
1,355.5
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
|
||||||||||||||
Cash paid for interest
|
|
$
|
2.8
|
|
|
$
|
3.6
|
|
|
$
|
10.9
|
|
|
$
|
9.2
|
|
Cash paid for income taxes
|
|
26.3
|
|
|
19.4
|
|
|
56.9
|
|
|
47.7
|
|
|
39
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
the loss of key personnel, including Mr. Ralph Lauren, or other changes in our executive and senior management team or to our operating structure, and our ability to effectively transfer knowledge during periods of transition;
|
•
|
our ability to successfully implement our long-term growth strategy and achieve anticipated operating enhancements and cost reductions from our restructuring plans;
|
•
|
the impact to our business resulting from investments and other costs incurred in connection with the execution of our long-term growth strategy, including restructuring-related charges, which may be dilutive to our earnings in the short term;
|
•
|
our ability to continue to expand or grow our business internationally and the impact of related changes in our customer, channel, and geographic sales mix as a result;
|
•
|
our ability to open new retail stores, concession shops, and digital commerce sites in an effort to expand our direct-to-consumer presence;
|
•
|
the impact to our business resulting from changes in consumers' ability, willingness, or preferences to purchase premium lifestyle products that we offer for sale and our ability to forecast consumer demand, which could result in either a build-up or shortage of inventory;
|
•
|
our ability to continue to maintain our brand image and reputation and protect our trademarks;
|
•
|
our ability to effectively manage inventory levels and the increasing pressure on our margins in a highly promotional retail environment;
|
•
|
the impact to our business resulting from potential costs and obligations related to the early closure of our stores or termination of our long-term, non-cancellable leases;
|
•
|
the impact of economic, political, and other conditions on us, our customers, suppliers, vendors, and lenders;
|
•
|
our ability to secure our facilities and systems and those of our third-party service providers from, among other things, cybersecurity breaches, acts of vandalism, computer viruses, or similar Internet or email events;
|
•
|
our efforts to successfully enhance, upgrade, and/or transition our global information technology systems and digital commerce platform;
|
•
|
the potential impact to our business resulting from the imposition of additional duties, tariffs, taxes, and other charges or barriers to trade, including those resulting from current trade developments with China;
|
•
|
a variety of legal, regulatory, tax, political, and economic risks, including risks related to the importation and exportation of products which our operations are currently subject to, or may become subject to as a result of potential changes in legislation, and other risks associated with our international operations, such as compliance with the Foreign Corrupt Practices Act or violations of other anti-bribery and corruption laws prohibiting improper payments, and the burdens of complying with a variety of foreign laws and regulations, including tax laws, trade and labor restrictions, and related laws that may reduce the flexibility of our business;
|
•
|
changes in our tax obligations and effective tax rate due to a variety of other factors, including potential additional changes in U.S. or foreign tax laws and regulations, accounting rules, or the mix and level of earnings by jurisdiction in future periods that are not currently known or anticipated;
|
|
40
|
|
•
|
the impact to our business resulting from the United Kingdom's decision to exit the European Union and the uncertainty surrounding the terms and conditions of such a withdrawal, as well as the related impact to global stock markets and currency exchange rates;
|
•
|
the impact to our business resulting from increases in the costs of raw materials, transportation, and labor, including healthcare-related costs;
|
•
|
our exposure to currency exchange rate fluctuations from both a transactional and translational perspective;
|
•
|
the potential impact to our business resulting from the financial difficulties of certain of our large wholesale customers, which may result in consolidations, liquidations, restructurings, and other ownership changes in the retail industry, as well as other changes in the competitive marketplace, including the introduction of new products or pricing changes by our competitors;
|
•
|
the potential impact on our operations and on our suppliers and customers resulting from natural or man-made disasters;
|
•
|
the impact to our business of events of unrest and instability that are currently taking place in certain parts of the world, as well as from any terrorist action, retaliation, and the threat of further action or retaliation;
|
•
|
our ability to maintain our credit profile and ratings within the financial community;
|
•
|
our ability to access sources of liquidity to provide for our cash needs, including our debt obligations, tax obligations, payment of dividends, capital expenditures, and potential repurchases of our Class A common stock, as well as the ability of our customers, suppliers, vendors, and lenders to access sources of liquidity to provide for their own cash needs;
|
•
|
the potential impact to the trading prices of our securities if our Class A common stock share repurchase activity and/or cash dividend payments differ from investors' expectations;
|
•
|
our intention to introduce new products or enter into or renew alliances;
|
•
|
changes in the business of, and our relationships with, major department store customers and licensing partners; and
|
•
|
our ability to make certain strategic acquisitions and successfully integrate the acquired businesses into our existing operations.
|
|
41
|
|
•
|
Overview.
This section provides a general description of our business, global economic conditions and industry trends, and a summary of our financial performance for the
three-month and nine-month periods ended
December 29, 2018
. In addition, this section includes a discussion of recent developments and transactions affecting comparability that we believe are important in understanding our results of operations and financial condition, and in anticipating future trends.
|
•
|
Results of operations.
This section provides an analysis of our results of operations for the
three-month and nine-month periods ended
December 29, 2018
as compared to the
three-month and nine-month periods ended
December 30, 2017
.
|
•
|
Financial condition and liquidity.
This section provides a discussion of our financial condition and liquidity as of
December 29, 2018
, which includes (i) an analysis of our financial condition as compared to the prior fiscal year-end; (ii) an analysis of changes in our cash flows for the
nine months ended
December 29, 2018
as compared to the
nine months ended
December 30, 2017
; (iii) an analysis of our liquidity, including the availability under our commercial paper borrowing program and credit facilities, common stock repurchases, payments of dividends, and our outstanding debt and covenant compliance; and (iv) a description of any material changes in our contractual and other obligations since
March 31, 2018
.
|
•
|
Market risk management.
This section discusses any significant changes in our risk exposures related to foreign currency exchange rates, interest rates, and our investments since
March 31, 2018
.
|
•
|
Critical accounting policies.
This section discusses any significant changes in our critical accounting policies since
March 31, 2018
. Critical accounting policies typically require significant judgment and estimation on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies, are summarized in Note 3 of the Fiscal
2018
10-K.
|
•
|
Recently issued accounting standards.
This section discusses the potential impact on our reported results of operations and financial condition of certain accounting standards that have been recently issued or proposed.
|
|
42
|
|
•
|
North America
— Our North America segment, representing approximately 52% of our Fiscal
2018
net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses in the U.S. and Canada, excluding Club Monaco. In North America, our wholesale business is comprised primarily of sales to department stores, and to a lesser extent, specialty stores. Our retail business in North America is comprised of our Ralph Lauren stores, our factory stores, and our digital commerce site, www.RalphLauren.com.
|
•
|
Europe
— Our Europe segment, representing approximately 26% of our Fiscal
2018
net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses in Europe and the Middle East, excluding Club Monaco. In Europe, our wholesale business is comprised of a varying mix of sales to both department stores and specialty stores, depending on the country. Our retail business in Europe is comprised of our Ralph Lauren stores, our factory stores, our concession-based shop-within-shops, and our various digital commerce sites.
|
•
|
Asia
— Our Asia segment, representing approximately 15% of our Fiscal
2018
net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses in Asia, Australia, and New Zealand. Our retail business in Asia is comprised of our Ralph Lauren stores, our factory stores, our concession-based shop-within-shops, and our digital commerce site, www.RalphLauren.cn, which launched in September 2018. In addition, we sell our products through various third-party digital partner commerce sites. In Asia, our wholesale business is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.
|
|
43
|
|
|
44
|
|
|
45
|
|
|
46
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||
|
|
(millions)
|
||||||||||||||
Impairment of assets (see Note 7)
|
|
$
|
(2.2
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
(13.3
|
)
|
|
$
|
(24.8
|
)
|
Restructuring and other charges (see Note 8)
|
|
(40.1
|
)
|
|
(23.3
|
)
|
|
(78.4
|
)
|
|
(78.7
|
)
|
||||
Restructuring-related inventory charges (see Note 8)
(a)
|
|
(3.1
|
)
|
|
—
|
|
|
(3.1
|
)
|
|
(1.3
|
)
|
||||
Total charges
|
|
$
|
(45.4
|
)
|
|
$
|
(27.2
|
)
|
|
$
|
(94.8
|
)
|
|
$
|
(104.8
|
)
|
|
(a)
|
Non-cash restructuring-related inventory charges are recorded within cost of goods sold in the consolidated statements of operations.
|
|
47
|
|
|
48
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
$
Change
|
|
% / bps
Change
|
|||||||
|
|
(millions, except per share data)
|
|
|
|||||||||||
Net revenues
|
|
$
|
1,725.8
|
|
|
$
|
1,641.8
|
|
|
$
|
84.0
|
|
|
5.1
|
%
|
Cost of goods sold
|
|
(666.3
|
)
|
|
(645.6
|
)
|
|
(20.7
|
)
|
|
3.2
|
%
|
|||
Gross profit
|
|
1,059.5
|
|
|
996.2
|
|
|
63.3
|
|
|
6.4
|
%
|
|||
Gross profit as % of net revenues
|
|
61.4
|
%
|
|
60.7
|
%
|
|
|
|
70 bps
|
|
||||
Selling, general, and administrative expenses
|
|
(823.4
|
)
|
|
(779.8
|
)
|
|
(43.6
|
)
|
|
5.6
|
%
|
|||
SG&A expenses as % of net revenues
|
|
47.7
|
%
|
|
47.5
|
%
|
|
|
|
20 bps
|
|
||||
Impairment of assets
|
|
(2.2
|
)
|
|
(3.9
|
)
|
|
1.7
|
|
|
(42.3
|
%)
|
|||
Restructuring and other charges
|
|
(40.1
|
)
|
|
(23.3
|
)
|
|
(16.8
|
)
|
|
71.9
|
%
|
|||
Operating income
|
|
193.8
|
|
|
189.2
|
|
|
4.6
|
|
|
2.4
|
%
|
|||
Operating income as % of net revenues
|
|
11.2
|
%
|
|
11.5
|
%
|
|
|
|
(30 bps)
|
|
||||
Interest expense
|
|
(5.2
|
)
|
|
(4.8
|
)
|
|
(0.4
|
)
|
|
8.7
|
%
|
|||
Interest income
|
|
9.9
|
|
|
3.3
|
|
|
6.6
|
|
|
199.5
|
%
|
|||
Other income (expense), net
|
|
1.0
|
|
|
(1.4
|
)
|
|
2.4
|
|
|
NM
|
|
|||
Income before income taxes
|
|
199.5
|
|
|
186.3
|
|
|
13.2
|
|
|
7.1
|
%
|
|||
Income tax provision
|
|
(79.5
|
)
|
|
(268.1
|
)
|
|
188.6
|
|
|
(70.4
|
%)
|
|||
Effective tax rate
(a)
|
|
39.8
|
%
|
|
143.9
|
%
|
|
|
|
(10,410 bps)
|
|
||||
Net income (loss)
|
|
$
|
120.0
|
|
|
$
|
(81.8
|
)
|
|
$
|
201.8
|
|
|
NM
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
1.50
|
|
|
$
|
(1.00
|
)
|
|
$
|
2.50
|
|
|
NM
|
|
Diluted
|
|
$
|
1.48
|
|
|
$
|
(1.00
|
)
|
|
$
|
2.48
|
|
|
NM
|
|
|
(a)
|
Effective tax rate is calculated by dividing the income tax provision by income before income taxes.
|
|
|
% Change
|
|
Digital commerce comparable store sales
|
|
18
|
%
|
Comparable store sales excluding digital commerce
|
|
1
|
%
|
Total comparable store sales
|
|
4
|
%
|
|
49
|
|
|
|
Three Months Ended
|
|
$ Change
|
|
Foreign Exchange Impact
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
As
Reported
|
|
|
Constant
Currency
|
|
As
Reported
|
|
Constant
Currency
|
|||||||||||||
|
|
(millions)
|
|
|
|
|
||||||||||||||||||||
Net Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
|
$
|
908.7
|
|
|
$
|
886.4
|
|
|
$
|
22.3
|
|
|
$
|
(1.1
|
)
|
|
$
|
23.4
|
|
|
2.5
|
%
|
|
2.6
|
%
|
Europe
|
|
415.2
|
|
|
378.5
|
|
|
36.7
|
|
|
(13.7
|
)
|
|
50.4
|
|
|
9.7
|
%
|
|
13.3
|
%
|
|||||
Asia
|
|
274.8
|
|
|
251.0
|
|
|
23.8
|
|
|
(4.9
|
)
|
|
28.7
|
|
|
9.5
|
%
|
|
11.4
|
%
|
|||||
Other non-reportable segments
|
|
127.1
|
|
|
125.9
|
|
|
1.2
|
|
|
(0.1
|
)
|
|
1.3
|
|
|
0.9
|
%
|
|
1.0
|
%
|
|||||
Total net revenues
|
|
$
|
1,725.8
|
|
|
$
|
1,641.8
|
|
|
$
|
84.0
|
|
|
$
|
(19.8
|
)
|
|
$
|
103.8
|
|
|
5.1
|
%
|
|
6.3
|
%
|
•
|
a $33.9 million net increase related to our North America retail business, inclusive of net unfavorable foreign currency effects of $0.8 million. On a constant currency basis, net revenues increased by $34.7 million driven by increases of $20.5 million in comparable store sales and $14.2 million in non-comparable store sales. The following table summarizes the percentage change in comparable store sales related to our North America retail business:
|
|
50
|
|
|
|
% Change
|
|
Digital commerce comparable store sales
|
|
21
|
%
|
Comparable store sales excluding digital commerce
|
|
—
|
%
|
Total comparable store sales
|
|
4
|
%
|
•
|
a $22.9 million net increase related to our Europe wholesale business, primarily driven by a shift in the timing of certain shipments and stronger demand, partially offset by net unfavorable foreign currency effects of $5.1 million; and
|
•
|
a $13.8 million net increase related to our Europe retail business, inclusive of net unfavorable foreign currency effects of $8.6 million. On a constant currency basis, net revenues increased by $22.4 million driven by increases of $13.4 million in non-comparable store sales and $9.0 million in comparable store sales. The following table summarizes the percentage change in comparable store sales related to our Europe retail business:
|
|
|
% Change
|
|
Digital commerce comparable store sales
|
|
13
|
%
|
Comparable store sales excluding digital commerce
|
|
3
|
%
|
Total comparable store sales
|
|
4
|
%
|
•
|
a $24.0 million net increase related to our Asia retail business, inclusive of net unfavorable foreign currency effects of $4.6 million. On a constant currency basis, net revenues increased by $28.6 million, reflecting increases of $18.9 million in non-comparable store sales driven by new store openings and $9.7 million in comparable store sales. The following table summarizes the percentage change in comparable store sales related to our Asia retail business:
|
|
|
% Change
|
|
Digital commerce comparable store sales
|
|
62
|
%
|
Comparable store sales excluding digital commerce
|
|
4
|
%
|
Total comparable store sales
|
|
4
|
%
|
|
51
|
|
|
|
Three Months Ended December 29, 2018
Compared to
Three Months Ended December 30, 2017 |
||
|
|
(millions)
|
||
SG&A expense category:
|
|
|
||
Marketing and advertising expenses
|
|
$
|
10.9
|
|
Selling-related expenses
|
|
9.4
|
|
|
Compensation-related expenses
|
|
8.6
|
|
|
Shipping and handling costs
|
|
6.8
|
|
|
Other
|
|
7.9
|
|
|
Total change in SG&A expenses
|
|
$
|
43.6
|
|
|
52
|
|
|
|
Three Months Ended
|
|
|
|
|
||||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
|
|
|
|||||||||||
|
Operating
Income |
|
Operating
Margin |
|
Operating
Income |
|
Operating
Margin |
|
$
Change |
|
Margin
Change |
|||||||
|
(millions)
|
|
|
|
(millions)
|
|
|
|
(millions)
|
|
|
|||||||
Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
204.3
|
|
|
22.5%
|
|
$
|
196.6
|
|
|
22.2%
|
|
$
|
7.7
|
|
|
30 bps
|
Europe
|
|
91.4
|
|
|
22.0%
|
|
81.0
|
|
|
21.4%
|
|
10.4
|
|
|
60 bps
|
|||
Asia
|
|
47.9
|
|
|
17.4%
|
|
44.3
|
|
|
17.6%
|
|
3.6
|
|
|
(20 bps)
|
|||
Other non-reportable segments
|
|
42.6
|
|
|
33.5%
|
|
37.1
|
|
|
29.5%
|
|
5.5
|
|
|
400 bps
|
|||
|
|
386.2
|
|
|
|
|
359.0
|
|
|
|
|
27.2
|
|
|
|
|||
Unallocated corporate expenses
|
|
(152.3
|
)
|
|
|
|
(146.5
|
)
|
|
|
|
(5.8
|
)
|
|
|
|||
Unallocated restructuring and other charges
|
|
(40.1
|
)
|
|
|
|
(23.3
|
)
|
|
|
|
(16.8
|
)
|
|
|
|||
Total operating income
|
|
$
|
193.8
|
|
|
11.2%
|
|
$
|
189.2
|
|
|
11.5%
|
|
$
|
4.6
|
|
|
(30 bps)
|
|
53
|
|
|
54
|
|
|
|
Nine Months Ended
|
|
|
|
|
|||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
$
Change
|
|
% / bps
Change
|
|||||||
|
|
(millions, except per share data)
|
|
|
|||||||||||
Net revenues
|
|
$
|
4,807.3
|
|
|
$
|
4,653.1
|
|
|
$
|
154.2
|
|
|
3.3
|
%
|
Cost of goods sold
|
|
(1,822.8
|
)
|
|
(1,809.9
|
)
|
|
(12.9
|
)
|
|
0.7
|
%
|
|||
Gross profit
|
|
2,984.5
|
|
|
2,843.2
|
|
|
141.3
|
|
|
5.0
|
%
|
|||
Gross profit as % of net revenues
|
|
62.1
|
%
|
|
61.1
|
%
|
|
|
|
100 bps
|
|
||||
Selling, general, and administrative expenses
|
|
(2,358.9
|
)
|
|
(2,266.9
|
)
|
|
(92.0
|
)
|
|
4.1
|
%
|
|||
SG&A expenses as % of net revenues
|
|
49.1
|
%
|
|
48.7
|
%
|
|
|
|
40 bps
|
|
||||
Impairment of assets
|
|
(13.3
|
)
|
|
(24.8
|
)
|
|
11.5
|
|
|
(46.4
|
%)
|
|||
Restructuring and other charges
|
|
(78.4
|
)
|
|
(78.7
|
)
|
|
0.3
|
|
|
(0.3
|
%)
|
|||
Operating income
|
|
533.9
|
|
|
472.8
|
|
|
61.1
|
|
|
12.9
|
%
|
|||
Operating income as % of net revenues
|
|
11.1
|
%
|
|
10.2
|
%
|
|
|
|
90 bps
|
|
||||
Interest expense
|
|
(15.6
|
)
|
|
(14.4
|
)
|
|
(1.2
|
)
|
|
8.5
|
%
|
|||
Interest income
|
|
29.5
|
|
|
7.6
|
|
|
21.9
|
|
|
291.2
|
%
|
|||
Other expense, net
|
|
(0.6
|
)
|
|
(1.7
|
)
|
|
1.1
|
|
|
(66.2
|
%)
|
|||
Income before income taxes
|
|
547.2
|
|
|
464.3
|
|
|
82.9
|
|
|
17.9
|
%
|
|||
Income tax provision
|
|
(147.9
|
)
|
|
(342.8
|
)
|
|
194.9
|
|
|
(56.8
|
%)
|
|||
Effective tax rate
(a)
|
|
27.0
|
%
|
|
73.8
|
%
|
|
|
|
(4,680 bps)
|
|
||||
Net income
|
|
$
|
399.3
|
|
|
$
|
121.5
|
|
|
$
|
277.8
|
|
|
228.7
|
%
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
4.92
|
|
|
$
|
1.49
|
|
|
$
|
3.43
|
|
|
230.2
|
%
|
Diluted
|
|
$
|
4.85
|
|
|
$
|
1.47
|
|
|
$
|
3.38
|
|
|
229.9
|
%
|
|
(a)
|
Effective tax rate is calculated by dividing the income tax provision by income before income taxes.
|
|
|
% Change
|
|
Digital commerce comparable store sales
|
|
10
|
%
|
Comparable store sales excluding digital commerce
|
|
(1
|
%)
|
Total comparable store sales
|
|
1
|
%
|
|
55
|
|
|
|
Nine Months Ended
|
|
$ Change
|
|
Foreign Exchange Impact
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
As
Reported
|
|
|
Constant
Currency
|
|
As
Reported
|
|
Constant
Currency
|
|||||||||||||
|
|
(millions)
|
|
|
|
|
||||||||||||||||||||
Net Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
|
$
|
2,494.5
|
|
|
$
|
2,471.7
|
|
|
$
|
22.8
|
|
|
$
|
(1.9
|
)
|
|
$
|
24.7
|
|
|
0.9
|
%
|
|
1.0
|
%
|
Europe
|
|
1,225.0
|
|
|
1,165.0
|
|
|
60.0
|
|
|
4.1
|
|
|
55.9
|
|
|
5.2
|
%
|
|
4.8
|
%
|
|||||
Asia
|
|
767.5
|
|
|
676.9
|
|
|
90.6
|
|
|
(2.3
|
)
|
|
92.9
|
|
|
13.4
|
%
|
|
13.7
|
%
|
|||||
Other non-reportable segments
|
|
320.3
|
|
|
339.5
|
|
|
(19.2
|
)
|
|
—
|
|
|
(19.2
|
)
|
|
(5.7
|
%)
|
|
(5.7
|
%)
|
|||||
Total net revenues
|
|
$
|
4,807.3
|
|
|
$
|
4,653.1
|
|
|
$
|
154.2
|
|
|
$
|
(0.1
|
)
|
|
$
|
154.3
|
|
|
3.3
|
%
|
|
3.3
|
%
|
•
|
a $36.1 million net increase related to our North America retail business, inclusive of net unfavorable foreign currency effects of $1.3 million. On a constant currency basis, net revenues increased by $37.4 million driven by increases of $24.7 million in non-comparable store sales and $12.7 million in comparable store sales. The following table summarizes the percentage change in comparable store sales related to our North America retail business:
|
|
|
% Change
|
|
Digital commerce comparable store sales
|
|
11
|
%
|
Comparable store sales excluding digital commerce
|
|
(1
|
%)
|
Total comparable store sales
|
|
1
|
%
|
•
|
a $43.4 million net increase related to our Europe wholesale business, primarily driven by a shift in the timing of certain shipments and stronger demand; and
|
•
|
a $16.6 million net increase related to our Europe retail business, inclusive of net favorable foreign currency effects of $4.5 million. On a constant currency basis, net revenues increased by $12.1 million driven by an increase of $26.6 million in non-comparable store sales, partially offset by a decrease of $14.5 million in comparable store sales. The following table summarizes the percentage change in comparable store sales related to our Europe retail business:
|
|
|
% Change
|
|
Digital commerce comparable store sales
|
|
6
|
%
|
Comparable store sales excluding digital commerce
|
|
(3
|
%)
|
Total comparable store sales
|
|
(2
|
%)
|
|
56
|
|
•
|
an $81.7 million net increase related to our Asia retail business, inclusive of net unfavorable foreign currency effects of $1.6 million. On a constant currency basis, net revenues increased by $83.3 million, reflecting increases of $52.3 million in non-comparable store sales driven by new store openings and $31.0 million in comparable store sales. The following table summarizes the percentage change in comparable store sales related to our Asia retail business:
|
|
|
% Change
|
|
Digital commerce comparable store sales
|
|
60
|
%
|
Comparable store sales excluding digital commerce
|
|
5
|
%
|
Total comparable store sales
|
|
5
|
%
|
•
|
an $8.9 million net increase related to our Asia wholesale business, primarily driven by our expansion in Japan, South Korea, and Southeast Asia.
|
|
|
Nine Months Ended December 29, 2018
Compared to
Nine Months Ended December 30, 2017
|
||
|
|
(millions)
|
||
SG&A expense category:
|
|
|
||
Marketing and advertising expenses
|
|
$
|
38.5
|
|
Selling-related expenses
|
|
24.7
|
|
|
Compensation-related expenses
|
|
16.6
|
|
|
Rent and occupancy expenses
|
|
10.1
|
|
|
Shipping and handling costs
|
|
8.8
|
|
|
Other
|
|
(6.7
|
)
|
|
Total change in SG&A expenses
|
|
$
|
92.0
|
|
|
57
|
|
|
|
Nine Months Ended
|
|
|
|
|
||||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
|
|
|
|||||||||||
|
Operating
Income
|
|
Operating
Margin
|
|
Operating
Income |
|
Operating
Margin
|
|
$
Change
|
|
Margin
Change
|
|||||||
|
(millions)
|
|
|
|
(millions)
|
|
|
|
(millions)
|
|
|
|||||||
Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
574.0
|
|
|
23.0%
|
|
$
|
549.3
|
|
|
22.2%
|
|
$
|
24.7
|
|
|
80 bps
|
Europe
|
|
291.9
|
|
|
23.8%
|
|
273.6
|
|
|
23.5%
|
|
18.3
|
|
|
30 bps
|
|||
Asia
|
|
123.3
|
|
|
16.1%
|
|
101.0
|
|
|
14.9%
|
|
22.3
|
|
|
120 bps
|
|||
Other non-reportable segments
|
|
97.9
|
|
|
30.6%
|
|
96.9
|
|
|
28.6%
|
|
1.0
|
|
|
200 bps
|
|||
|
|
1,087.1
|
|
|
|
|
1,020.8
|
|
|
|
|
66.3
|
|
|
|
|||
Unallocated corporate expenses
|
|
(474.8
|
)
|
|
|
|
(469.3
|
)
|
|
|
|
(5.5
|
)
|
|
|
|||
Unallocated restructuring and other charges
|
|
(78.4
|
)
|
|
|
|
(78.7
|
)
|
|
|
|
0.3
|
|
|
|
|||
Total operating income
|
|
$
|
533.9
|
|
|
11.1%
|
|
$
|
472.8
|
|
|
10.2%
|
|
$
|
61.1
|
|
|
90 bps
|
|
58
|
|
|
59
|
|
|
|
December 29,
2018 |
|
March 31,
2018 |
|
$
Change |
||||||
|
|
(millions)
|
||||||||||
Cash and cash equivalents
|
|
$
|
680.5
|
|
|
$
|
1,304.6
|
|
|
$
|
(624.1
|
)
|
Short-term investments
|
|
1,382.5
|
|
|
699.4
|
|
|
683.1
|
|
|||
Non-current investments
(a)
|
|
45.7
|
|
|
86.2
|
|
|
(40.5
|
)
|
|||
Short-term debt
(b)
|
|
—
|
|
|
(10.1
|
)
|
|
10.1
|
|
|||
Current portion of long-term debt
(b)
|
|
—
|
|
|
(298.1
|
)
|
|
298.1
|
|
|||
Long-term debt
(b)
|
|
(686.8
|
)
|
|
(288.0
|
)
|
|
(398.8
|
)
|
|||
Net cash and investments
(c)
|
|
$
|
1,421.9
|
|
|
$
|
1,494.0
|
|
|
$
|
(72.1
|
)
|
Equity
|
|
$
|
3,353.9
|
|
|
$
|
3,457.4
|
|
|
$
|
(103.5
|
)
|
|
(a)
|
Recorded within other non-current assets in our consolidated balance sheets.
|
(b)
|
See
Note 10
to the accompanying consolidated financial statements for discussion of the carrying values of our debt.
|
(c)
|
"Net cash and investments" is defined as cash and cash equivalents, plus short-term and non-current investments, less total debt.
|
|
|
Nine Months Ended
|
|
|
||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
$
Change |
||||||
|
|
(millions)
|
||||||||||
Net cash provided by operating activities
|
|
$
|
683.1
|
|
|
$
|
951.1
|
|
|
$
|
(268.0
|
)
|
Net cash used in investing activities
|
|
(810.1
|
)
|
|
(317.8
|
)
|
|
(492.3
|
)
|
|||
Net cash used in financing activities
|
|
(481.1
|
)
|
|
(158.7
|
)
|
|
(322.4
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
|
(23.9
|
)
|
|
36.8
|
|
|
(60.7
|
)
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
|
$
|
(632.0
|
)
|
|
$
|
511.4
|
|
|
$
|
(1,143.4
|
)
|
|
60
|
|
•
|
an unfavorable change related to our income tax payable, largely a result of the decrease in charges recorded in connection with the TCJA's mandatory transition tax as compared to the prior year period;
|
•
|
a year-over-year increase in our inventory levels largely due to the timing of certain inventory receipts, as well as to support our revenue growth;
|
•
|
an unfavorable change related to accrued expenses and other current liabilities largely driven by fluctuations associated with our derivative instruments; and
|
•
|
unfavorable changes related to our accounts receivable and prepaid expenses and other current assets, largely driven by the timing of cash receipts and payments, respectively.
|
•
|
a
$462.4 million
increase in purchases of investments, less proceeds from sales and maturities of investments. During the
nine months ended December 29, 2018
, we made net investment purchases of
$652.6 million
, as compared to
$190.2 million
during the
nine months ended December 30, 2017
;
|
•
|
a
$26.2 million
increase in capital expenditures. During the
nine months ended December 29, 2018
, we spent
$149.2 million
on capital expenditures, as compared to
$123.0 million
during the
nine months ended December 30, 2017
. Our capital expenditures during the
nine months ended December 29, 2018
primarily related to new store openings, retail and department store renovations, and enhancements to our information technology systems; and
|
•
|
a
$23.8 million
increase in payments to settle net investment hedges.
|
•
|
a
$416.0 million
increase in cash used to repurchase shares of our Class A common stock. During the
nine months ended December 29, 2018
, we used
$400.0 million
to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional
$31.9 million
in shares of Class A common stock were surrendered or withheld in satisfaction of withholding taxes in connection with the vesting of awards under our long-term stock incentive plans. On a comparative basis, during the
nine months ended December 30, 2017
,
$15.9 million
in shares of Class A common stock were surrendered or withheld for taxes; and
|
•
|
a
$19.9 million
increase in payments of dividends, driven by an increase to the quarterly cash dividend per share (as discussed within "
Dividends
" below). Dividends paid amounted to
$141.6 million
and
$121.7 million
during the
nine-month periods ended
December 29, 2018
and
December 30, 2017
, respectively.
|
|
61
|
|
•
|
an
$88.2 million
increase in cash proceeds from the issuance of debt, less debt repayments. During the
nine months ended December 29, 2018
, we received
$398.1 million
in proceeds from our issuance of 3.750% unsecured senior notes in August 2018, a portion of which was used to repay $300.0 million of our 2.125% unsecured senior notes that matured in September 2018. Additionally, during the
nine months ended December 29, 2018
, we repaid $9.9 million of borrowings previously outstanding under our credit facilities. On a comparative basis, during the
nine months ended December 30, 2017
, we did not issue or repay any debt; and
|
•
|
a
$21.7 million
increase in proceeds from exercise of stock options.
|
|
|
December 29, 2018
|
||||||||||
Description
(a)
|
|
Total
Availability
|
|
Borrowings
Outstanding
|
|
Remaining
Availability
|
||||||
|
|
(millions)
|
||||||||||
Global Credit Facility and Commercial Paper Program
(b)
|
|
$
|
500
|
|
|
$
|
10
|
|
(c)
|
$
|
490
|
|
Pan-Asia Credit Facilities
|
|
34
|
|
|
—
|
|
|
34
|
|
|
(a)
|
As defined in
Note 10
to the accompanying consolidated financial statements.
|
(b)
|
Borrowings under the Commercial Paper Program are supported by the Global Credit Facility. Accordingly, we do not expect combined borrowings outstanding under the Commercial Paper Program and the Global Credit Facility to exceed $500 million.
|
(c)
|
Represents outstanding letters of credit for which we were contingently liable under the Global Credit Facility as of
December 29, 2018
.
|
|
62
|
|
|
63
|
|
|
|
Remainder of
Fiscal 2019
|
|
Fiscal
2020-2021
|
|
Fiscal
2022-2023
|
|
Fiscal 2024
and Thereafter
|
|
Total
|
||||||||||
|
|
(millions)
|
||||||||||||||||||
Minimum lease payments
(a)
|
|
$
|
—
|
|
|
$
|
29.6
|
|
|
$
|
55.2
|
|
|
$
|
261.8
|
|
|
$
|
346.6
|
|
|
(a)
|
Excludes future minimum rental payments related to the original lease term and space for the corporate office in New York City, which were included in the minimum lease payments disclosed in the Fiscal 2018 10-K, as referenced below.
|
|
64
|
|
|
65
|
|
|
66
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
(a)
|
Sales of Unregistered Securities
|
(b)
|
Not Applicable
|
|
67
|
|
(c)
|
Stock Repurchases
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs
(a)
|
||||||
|
|
|
|
|
|
|
(millions)
|
||||||
September 30, 2018 to October 27, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
907
|
|
October 28, 2018 to December 1, 2018
|
1,044,425
|
|
|
119.23
|
|
|
1,044,425
|
|
|
783
|
|
||
December 2, 2018 to December 29, 2018
|
780,613
|
|
(b)
|
106.95
|
|
|
777,281
|
|
|
700
|
|
||
|
1,825,038
|
|
|
|
|
1,821,706
|
|
|
|
|
(a)
|
Repurchases of shares of Class A common stock are subject to overall business and market conditions.
|
(b)
|
Includes 3,332 shares surrendered to or withheld by the Company in satisfaction of withholding taxes in connection with the vesting of awards issued under its long-term stock incentive plans.
|
Item 6.
|
Exhibits.
|
3.1
|
|
3.2
|
|
3.3
|
|
10.1*
|
|
10.2*
|
|
10.3*
|
|
31.1*
|
|
31.2*
|
|
32.1*
|
|
32.2*
|
|
101*
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at December 29, 2018 and March 31, 2018, (ii) the Consolidated Statements of Operations for the three-month and nine-month periods ended December 29, 2018 and December 30, 2017, (iii) the Consolidated Statements of Comprehensive Income (Loss) for the three-month and nine-month periods ended December 29, 2018 and December 30, 2017, (iv) the Consolidated Statements of Cash Flows for the nine-month periods ended December 29, 2018 and December 30, 2017, and (v) the Notes to the Consolidated Financial Statements.
|
|
*
|
Filed herewith.
|
†
|
Management contract or compensatory plan or arrangement.
|
|
68
|
|
|
|
RALPH LAUREN CORPORATION
|
|
|
|
|
By:
|
/
S
/ JANE HAMILTON NIELSEN
|
|
|
Jane Hamilton Nielsen
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
Date: February 7, 2019
|
|
|
|
69
|
|
|
|
|
1.
|
Attract and retain exceptional individuals of superior talent
|
2.
|
Motivate such individuals to achieve longer-range performance
|
3.
|
Enable such individuals to participate in the long-term growth and financial success of the Company
|
|
|
2
|
|
Fiscal 2019 PSU Overview
|
|
|
|
An eligible employee who receives an Unsatisfactory (U) rating
|
||||
on their annual performance appraisal is not eligible for an equity award
|
||||
in the fiscal year following that performance appraisal period. An employee who receives a Below
|
||||
Expectations (B) performance rating will be eligible for an equity award based on manager discretion.
|
▪
|
Net Earnings or Net Income (before or after taxes)
|
▪
|
Basic or Diluted Earnings Per Share (before or after taxes)
|
▪
|
Net Operating Profit (before or after taxes)
|
▪
|
Net Revenue or Net Revenue Growth
|
▪
|
Gross Profit or Gross Profit Growth
|
▪
|
Return Measures (including but not limited to Return on Assets, Investments, Capital)
|
▪
|
Other measures of economic value added or other value creation metrics
|
|
|
|
Comparator Group for TSR
|
||
Dillard's, Inc.
|
Nordstrom, Inc.
|
Tiffany & Co.
|
The Gap, Inc.
|
PVH Corp.
|
Under Armour, Inc.
|
L Brands, Inc.
|
RH (Restoration Hardware, Inc.)
|
Urban Outfitters, Inc.
|
Macy's, Inc.
|
Tapestry, Inc. (Coach/Kate Spade)
|
V.F. Corporation
|
Michael Kors Holdings Limited
|
The TJX Companies, Inc.
|
Williams-Sonoma, Inc.
|
Nike, Inc.
|
|
|
Performance
Level
|
Relative TSR
Performance
|
% of Target
PSUs Vested
|
Below Threshold
|
<30
th
Percentile
|
0%
|
Threshold
|
30
th
Percentile
|
50%
|
Target
|
50
th
Percentile
|
100%
|
Stretch
|
70
th
Percentile
|
150%
|
Maximum
|
90
th
Percentile
|
200%
|
|
|
4
|
|
Fiscal 2019 PSU Overview
|
|
|
|
Grant Date
|
# PSUs
Granted
|
Performance
Period
|
Vesting
Date
1
|
Performance
Level
2
|
Vested
Percentage
2
|
# Shares
Vested
|
FY19 (August 2018)
|
1,500
|
FY19 - FY21
|
FY21 (June 2021)
|
110%
|
200%
|
3,000
|
100%
|
100%
|
1,500
|
||||
90%
|
50%
|
750
|
Grant Date
|
# PSUs
Granted
|
Performance
Period
|
Vesting
Date
1
|
Performance
Level
2
|
Vested
Percentage
2
|
# Shares
Vested
|
FY19 (August 2018)
|
1,000
|
FY19 - FY21
|
FY21 (June 2021)
|
90
th
Percentile
|
200%
|
2,000
|
50
th
Percentile
|
100%
|
1,000
|
||||
30
th
Percentile
|
50%
|
500
|
▪
|
Receive shares of RL Class A Common Stock without paying any exercise price
|
▪
|
The number of PSUs vesting can range from 50% (Threshold) to 200% (Maximum) of the target shares granted
|
▪
|
Any increases in the Company’s Class A Common Stock price above the price on the grant date increases the value of the award
|
|
|
5
|
|
Fiscal 2019 PSU Overview
|
|
|
|
|
|
If Stock Price Reaches:
|
|||
Value At:
|
# of Shares
|
$120
|
$130
|
$140
|
$150
|
Threshold Performance
|
1,250
|
$150,000
|
$162,500
|
$175,000
|
$187,500
|
Target Performance
|
2,500
|
$300,000
|
$325,000
|
$350,000
|
$375,000
|
Maximum Performance
|
5,000
|
$600,000
|
$650,000
|
$700,000
|
$750,000
|
|
|
6
|
|
Fiscal 2019 PSU Overview
|
|
|
|
Termination as a result of:
|
Status of PSU Awards
|
Retirement
1
Long-Term Disability (LTD)
2
Death
|
If retirement date is more than one year from the date of grant, participant is entitled to full award on the scheduled vesting date. Payout is based on performance achievement.
If retirement date is within the first year following the grant date, participant is entitled to one-third of award on the scheduled vesting date. Payout is based on performance achievement. All remaining PSUs are forfeited.
The above is subject to the terms and conditions in the On-Line Grant Agreement.
|
Voluntary Resignation
Involuntary Termination
|
All unvested PSUs are forfeited.
|
|
|
7
|
|
Fiscal 2019 PSU Overview
|
|
|
|
▪
|
Earnings or other financial information
|
▪
|
Changes in dividend policy
|
▪
|
Stock splits
|
▪
|
Mergers and acquisitions
|
▪
|
Major new contracts or product-line introductions
|
▪
|
Litigation involving substantial amounts of money
|
▪
|
Changes in management
|
▪
|
“In and out” trading in securities of the Company.
Any Company stock purchased in the market must be held for a minimum of six months and ideally longer. Note that the Securities and Exchange Commission (SEC) has a “short-swing profit recapture” rule that effectively prohibits Executive Officers and members of the Board of Directors from selling any Company stock within six months of a purchase. The Company has extended this prohibition to all employees. The receipt of shares pursuant to the vesting of PSU awards is not considered a purchase under the SEC’s rule.
|
|
|
8
|
|
Fiscal 2019 PSU Overview
|
|
|
|
▪
|
Purchases of stock of the Company on margin.
|
▪
|
Short sales
(i.e., selling stock one does not own and then borrowing the shares to make delivery).
|
▪
|
“Hedging” and Pledging of Company Stock.
No insider, including any director, officer or employee of the Company, shall purchase or sell, or make any offer to purchase or offer to sell derivative securities relating to the Company’s securities, whether or not issued by the Company, such as exchange traded options to purchase or sell the Company’s securities (so called “puts” and “calls”) or financial instruments that are designed to hedge or offset any decrease in the market value of the Company’s securities. In addition, no director or Section 16 Officer of the Company shall hold the Company’s securities in a margin account, or maintain or enter into any arrangement that, directly or indirectly, involves pledging the Company’s securities as collateral for a loan.
|
For employees at the Senior Vice President level or above (“Officers”) and for all employees in the Finance,
|
||||
Legal and People and Development departments, all transactions in the Company’s securities (including,
|
||||
but not limited to purchases, sales, transfers, etc.) must be conducted during an open trading window and
|
||||
pre-cleared with the Corporate Counsel, or their designee. If contemplating a transaction, please provide a
|
||||
written request via e-mail to RLTrading@ralphlauren.com, specifying the number of shares you wish to
|
||||
sell
before
contacting Merrill Lynch or any other broker, or taking any other step to initiate a transaction.
|
|
|
9
|
|
Fiscal 2019 PSU Overview
|
|
|
|
(a)
|
the Plan is established voluntarily by the Company, is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
(b)
|
the grant of PSU awards is voluntary and occasional and does not create any contractual or other right to receive future PSU awards, or benefits in lieu of these awards, even if PSU awards have been granted in the past;
|
(c)
|
all decisions with respect to future PSU awards, if any, will be at the sole discretion of the Compensation Committee;
|
(d)
|
the Participant's participation in the Plan shall not create a right to further employment or service with the Company or, if different, the employing Subsidiary and shall not interfere with the ability of the Company or employing Subsidiary to terminate the Participant's employment or service relationship at any time with or without cause;
|
(e)
|
the Participant is voluntarily participating in the Plan;
|
(f)
|
any PSU awards and the Company's Class A Common Stock subject to awards, and the income and value of same, are not part of the Participant's normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar payments; and
|
(g)
|
no claim or entitlement to compensation or damages shall arise from the forfeiture of a PSU award resulting from the Participant's termination of employment or service (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or rendering services or the terms of the Participant's employment or service agreement, if any), and in consideration of the grant of a PSU award to which the Participant is otherwise not entitled, the Participant irrevocably agrees never to institute any claim against the Company or any Subsidiary.
|
|
|
10
|
|
Fiscal 2019 PSU Overview
|
|
|
|
|
|
11
|
|
Fiscal 2019 PSU Overview
|
Award Type
|
Number of Shares
|
PRSUs
|
[_____]
|
•
|
Vest over a three‐year period in one‐third annual installments (tranches) beginning FY20 if the FY19 performance goal (ROIC of [__]%) is achieved and certified by the Compensation and Organizational Development Committee, and employment is continuous.
|
|
|
|
1.
|
Attract and retain exceptional individuals of superior talent
|
2.
|
Motivate such individuals to achieve longer-range performance
|
3.
|
Enable such individuals to participate in the long-term growth and financial success of the Company
|
|
|
2
|
|
Fiscal 2019 RSU Overview
|
|
|
|
An eligible employee who receives an Unsatisfactory (U) rating on their annual performance
|
||||
appraisal is not eligible for an equity award in the fiscal year following that performance appraisal period.
|
||||
An eligible employee who receives a Below Expectations (B) performance rating will be eligible for an
|
||||
equity award based on manager discretion.
|
Grant Date
|
RSUs
Eligible to Vest
|
Vesting
Date
|
May 15, 2018
|
70
|
May 15, 2019
|
May 15, 2018
|
70
|
May 15, 2020
|
May 15, 2018
|
70
|
May 15, 2021
|
Total
|
210
|
|
Year Granted
|
RSUs Granted
|
1/3 of RSUs Eligible to Vest
|
||
May 2018
|
May 2019
|
May 2020
|
||
May 2017
|
300
|
100
|
100
|
100
|
May 2018
|
210
|
-
|
70
|
70
|
May 2019
|
270
|
-
|
-
|
90
|
Total RSUs
|
780
|
100
|
170
|
260
|
|
|
3
|
|
Fiscal 2019 RSU Overview
|
|
|
|
|
|
If Stock Price Reaches:
|
|||
|
# of Shares
|
$110
|
$120
|
$130
|
$140
|
Value
(assumes shares vest)
|
210
|
$23,100
|
$25,200
|
$27,300
|
$29,400
|
|
|
4
|
|
Fiscal 2019 RSU Overview
|
|
|
|
Termination as a result of:
|
Status of RSU Awards
|
Retirement
1
Long-Term Disability (LTD)
2
Death
|
If retirement date is more than one year from the date of grant, participant is entitled to full award on scheduled vesting dates.
If retirement date is within the first year following the Grant date, participant is entitled to one-third of award on the first scheduled vesting date. All remaining RSUs are forfeited.
The above is subject to the terms and conditions in the On-Line Grant Agreement.
|
Voluntary Resignation
Involuntary Termination
|
All unvested RSUs are forfeited.
|
|
|
5
|
|
Fiscal 2019 RSU Overview
|
|
|
|
▪
|
Earnings or other financial information
|
▪
|
Changes in dividend policy
|
▪
|
Stock splits
|
▪
|
Mergers and acquisitions
|
▪
|
Major new contracts or product-line introductions
|
▪
|
Litigation involving substantial amounts of money
|
▪
|
Changes in management
|
▪
|
“In and out” trading in securities of the Company.
Any Company stock purchased in the market must be held for a minimum of six months and ideally longer. Note that the Securities and Exchange Commission (SEC) has a “short-swing profit recapture” rule that effectively prohibits Executive Officers and members of the Board of Directors from selling any Company stock within six months of a purchase. The Company has extended this prohibition to all employees. The receipt of shares pursuant to the vesting of RSU awards is not considered a purchase under the SEC’s rule.
|
|
|
6
|
|
Fiscal 2019 RSU Overview
|
|
|
|
▪
|
Purchases of stock of the Company on margin.
|
▪
|
Short sales
(i.e., selling stock one does not own and then borrowing the shares to make delivery).
|
▪
|
“Hedging” and Pledging of Company Stock.
No insider, including any director, officer or employee of the Company, shall purchase or sell, or make any offer to purchase or offer to sell derivative securities relating to the Company’s securities, whether or not issued by the Company, such as exchange traded options to purchase or sell the Company’s securities (so called “puts” and “calls”) or financial instruments that are designed to hedge or offset any decrease in the market value of the Company’s securities.
|
For employees at the Senior Vice President level or above (“Officers”) and for all employees in the Finance,
|
||||
Legal and People and Development departments, all transactions in the Company’s securities (including,
|
||||
but not limited to purchases, sales, transfers, etc.) must be conducted during an open trading window and
|
||||
pre-cleared with the Corporate and Securities Counsel, or their designee. If contemplating a transaction,
|
||||
please provide a written request via e-mail to RLTrading@ralphlauren.com, specifying the number of
|
||||
shares you wish to sell
before
contacting Merrill Lynch or any other broker, or taking any other step to
|
||||
initiate a transaction.
|
|
|
7
|
|
Fiscal 2019 RSU Overview
|
|
|
|
(a)
|
the Plan is established voluntarily by the Company, is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
(b)
|
the grant of RSU awards is voluntary and occasional and does not create any contractual or other right to receive future RSU awards, or benefits in lieu of these awards, even if RSU awards have been granted in the past;
|
(c)
|
all decisions with respect to future RSU awards, if any, will be at the sole discretion of the Compensation Committee;
|
(d)
|
the Participant's participation in the Plan shall not create a right to further employment or service with the Company or, if different, the employing Subsidiary and shall not interfere with the ability of the Company or employing Subsidiary to terminate the Participant's employment or service relationship at any time with or without cause;
|
(e)
|
the Participant is voluntarily participating in the Plan;
|
(f)
|
any RSU awards and the Company's Class A Common Stock subject to awards, and the income and value of same, are not part of the Participant's normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar payments; and
|
(g)
|
no claim or entitlement to compensation or damages shall arise from the forfeiture of a RSU award resulting from the Participant's termination of employment or service (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or rendering services or the terms of the Participant's employment or service agreement, if any), and in consideration of the grant of a RSU award to which the Participant is otherwise not entitled, the Participant irrevocably agrees never to institute any claim against the Company or any Subsidiary.
|
|
|
8
|
|
Fiscal 2019 RSU Overview
|
|
|
|
|
|
9
|
|
Fiscal 2019 RSU Overview
|
|
/s/ PATRICE LOUVET
|
|
Patrice Louvet
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
Date: February 7, 2019
|
|
|
/s/ JANE HAMILTON NIELSEN
|
|
Jane Hamilton Nielsen
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
|
Date: February 7, 2019
|
|
|
/s/ PATRICE LOUVET
|
|
Patrice Louvet
|
|
|
February 7, 2019
|
|
|
/s/ JANE HAMILTON NIELSEN
|
|
Jane Hamilton Nielsen
|
|
|
February 7, 2019
|
|